§ 3.32 p. m.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Hay man)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 Hayman.)
§ On Question, Motion agreed to.
§ Earl Howe moved Amendment No. 47:
§ After Clause 18, insert the following new clause—
§
INDEPENDENT HOSPITALS
(". —
unless they are used or intended to be used for the provision of treatment by specially controlled techniques as defined in section 21 of the Registered Homes Act 1984 and any regulations made thereunder;
§ The noble Earl said: My Lords, this amendment is a reformulation of a number of separate amendments tabled in Committee, but in a less prescriptive form. Its purpose is to permit but not oblige the Secretary of State to extend both the duty of quality and the remit of the commission for health improvement to the independent sector.
§ In Committee the Minister made some helpful comments on the issue. She recognised that the regulation of the independent sector was an issue of importance which needed to be addressed. She confirmed that the Government were committed to consulting on it and suggested that the right time to look fully at the subject would be after the Select Committee in another place had reported. If I do not misrepresent her, she wanted to avoid a straightforward transposition of the structures and systems in the Bill on to the private sector without first listening to the views expressed from all quarters.
§ That for me is a position with which it would be hard to disagree. However, the concern which some of us had in Committee was that the Health Bill represents an ideal opportuniy—and probably the only legislative opportunity for some time—to make provision for regulating the private sector. If we do not take this opportunity, we could be kicking the issue into some very long grass.
§ My noble friend Lord Skelmersdale suggested the obvious way to get round the dilemma: to insert enabling powers into the Bill allowing the Government to apply as many of their clinical governance provisions as seemed to them appropriate to the independent sector at some point in the future. One of the remarks I hear on occasions is that the independent sector does not want to be regulated. If that were once true, it is true no longer. As I mentioned on the last occasion, the independent sector has already responded extremely positively to the Government's quality agenda on a voluntary basis. A lot of work has been done under the auspices of the private practice forum of the Academy of Royal Medical Colleges. There is, I believe, a real recognition in the sector that quality in the delivery of healthcare should apply across the board as a matter of principle in independent hospitals and the NHS; and that the regulatory framework supporting that should not be subject to any artificial barriers or boundaries.
832§ There is, after all, a considerable day-to-day overlap between the two sectors. A high proportion of the doctors and consultants who work in the private sector also work for the NHS. Many NHS patients are treated in private hospitals. NHS hospitals treat private patients. In fact the extent to which the private sector now shoulders the burden of elective surgery across the country as a whole is not often appreciated. The estimate I have been given is about 15 per cent. of all waiting list type treatments. For some procedures such as hip and knee replacements and heart bypasses, the figure is probably nearer one in four. It is as important for patients to know how well doctors are performing in their private practice as anywhere else, and to know that the highest possible standards are being followed in private hospitals.
§ I know from personal experience of two excellent private hospitals, one brand new and one well established, which are struggling to achieve recognition, that private insurance groups require hospitals on their preferred lists to demonstrate certain standards. I believe that the amendment would help those hospitals to demonstrate such standards.
§ The other criticism is: "The NHS should not be regulating the private healthcare sector". That is a complete misreading of the proposal I am advancing. The Government are establishing two brand new bodies: the national institute for clinical excellence; and the commission for health improvement, at either end of a continuum of clinical guidance. At one end we shall have NICE producing guidance for doctors on the treatments that work and those that do not. In the middle we shall have local clinical governance arrangements in hospitals, GP practices, and so on. We shall have the professions and the colleges overseeing those arrangements. At the other end of the continuum we shall have the commission for health improvement in the role of inspector and auditor. It cannot make sense to exclude from that national framework a significant part of this country's healthcare providers.
§ Indeed, we need to remind ourselves that the Secretary of State has the duty to promote the health of the nation. That does not mean the health of only those who happen to be treated under the state system, but the health of everyone. It means that he has a responsibility for the totality of healthcare delivered in this country by whomever it is delivered. Anything less than that and the patient will be short-changed.
§ It is not my intention to force the Government to act now or to prescribe a set of clinical governance arrangements which do not fit. The amendment deliberately allows for flexibility. I believe that it is a sensible proposal; it is a proposal that is in the interests of patients and I commend it strongly to the House. I beg to move.
§ Lord Clement-JonesMy Lords, I rise to lend strong support to the amendment and I remind the House that it is the offspring of amendments tabled by both Opposition Front Benches in Committee and the ensuing debate.
833 In Committee, the Minister said that the Government intend to consult soon on the regulation of the independent or private acute healthcare sector. Regrettably, however, she gave no assurance that a duty of quality, identical to that proposed for the NHS, will be required for that sector. Nor did she address the point that considerable benefits would accrue from that sector being regulated by the same body, and largely in the same way, as the NHS. Some of the benefits of this approach have already been outlined by the noble Earl, Lord Howe.
They include consistent standards when NHS and private care are provided alongside each other in independent hospitals such as in medium-secure psychiatric units; and consistent standards of clinical governance nationwide so that consultants have no doubt as to the standards expected in all their practice. It makes no sense at all to exclude some 800, 000 treatments a year carried out in private hospitals and work done by more than 17, 000 doctors, most of whom also work in the NHS. Very few consultants practise only in the private sector.
The overwhelming majority of independent sector hospitals, in membership of the Independent Healthcare Association, actively support the need for such change, as do key leaders in the medical profession. Individual independent sector companies such as BUPA and PPP have gone clearly on the record in support.
The major players in the independent sector have already committed to a framework for the conduct of private medicine under the auspices of the Private Practice Forum of the Academy of Medical Royal Colleges. This framework matches the quality in clinical governance duties proposed to the NHS, but it now applies only on a voluntary basis. The Government should seize the opportunity that the amendment presents; to reserve the power to apply these duties to non-NHS providers of healthcare by regulation.
The amendment, as the noble Earl explained, has been revised in the light of the Minister's previous comments. It would allow the Secretary of State to delay using the powers until the Government have reflected on their own consultation and the deliberations of the Health Committee in the other place. The amendment is not prescriptive in any way. It does not, for instance, prevent separate registration requirements being instituted. It merely provides a framework for the extension of the duty of quality and the functions of the commission for health improvement.
The amendment clearly commands widespread support. Regrettably, the Secretary of State seems, if a recent article in the Independent is accurate, to have set his face against it. Forgetting, no doubt, that separate amendments in Committee stood in the name of both Opposition Front Benches, a "ministerial spokesman" is quoted as saying:
The Tories are again pushing the agenda of the private health sector. We do think it needs regulating, but we don't think it's for the NHS to regulate private health care. The NHS would end up picking up the tab. We don't think it is right".834 After all our discussions about charging by CHIMP, that final comment in particular seems very wide of the mark. But in general, the comment appears to have no concept of the benefits of common regulation for healthcare in this country.The noble Baroness herself said in Committee that there is no intention of applying the commission to the private sector as regards providing care for private patients. So much for future consultation. Indeed, from reports in today's Times, it appears that the Secretary of State is planning to set up a separate inspectorate to regulate the independent sector. It appears that the Government have firmly made up their mind on purely ideological grounds.
In a recent column, the health correspondent of the Financial Times and the author of the definitive history of the welfare state, The Five Giants, Nicholas Timmins, writes:
If the NHS wants a true picture of how well its doctors perform it needs the full picture, not just the NHS one".He concludes:Mr. Dobson has the chance to become the first Secretary of State for Health, not just the NHS. He should take it".This Secretary of State prides himself on his common sense image. This amendments makes common sense.On these Benches, we have no particular axe to grind for private health. However, we believe that every patient should have the right to minimum standards of quality care and safety, irrespective of the: sector in which they are treated. I urge the noble Baroness to consider the amendment most carefully at a time when we have the legislative opportunity before us and to demonstrate the open-mindedness she has shown in many other parts of the Bill.
§ 3.45 p. m.
§ Lord SkelmersdaleMy Lords, it must be very rare for a Back Bencher in Committee to draw a bow to venture and land not one but two palpable hits on the senior spokesmen representing the two Opposition Front Benches. I am grateful to both of them for what they have said. They made a much better fist of it than I would have been able to do today.
It is absolutely vital that regulation and inspection of private hospitals and private practice is achieved by hook or by crook. From what the noble Baroness said in Committee, I know that she believes that too, but she wants to wait. I readily understand why she wants to wait, but I hope that that is not an argument for promoting the doctrine of unripe time. There is never a right time for these things, but she should grab the opportunity. After all, primary legislation is an uncertain vehicle as regards timing. That is why in Clause 47 and Schedule 3, which we shall debate later today, the Government are taking the opportunity to speed up the process of registration and so forth by—guess what—secondary legislation. That is exactly what my noble friend is asking for today.
§ Baroness Carnegy of LourMy Lords, I believe that the resistance to including independent hospitals in the Bill is most revealing and rather distressing. We are told 835 a great deal about how the third way involves partnership between the private and public sectors and the resistance is clearly a means of doing something different for people who pay as opposed to those who do not. It will be very disappointing to the public who are at present watching new Labour very carefully.
However, the Minister is the first to know that the people who are keenest of all to keep an eye on the standards of care for patients are the nurses. My experience is that when any maltreatment, or possible maltreatment, is occurring in a hospital, or involving a doctor, where nurses are involved it is often the nurses who blow the whistle. They may do so in a number of ways, but they do. They are the people who are writing most clearly to noble Lords to inform them that the issue is important now and that we should not wait. They are saying that extremely clearly.
Amendment No. 77, which relates to Scotland, matches this amendment. The feeling about the issue is every bit as strong in Scotland as it is south of the Border. Because there is no CHIMP in Scotland, it is important to discuss the matter separately and we look forward to hearing what the noble Lord, Lord Macdonald, has to say about it.
I support the amendment most strongly not only because the nurses are so keen on it, and they know, but also because it is very odd to treat people who pay, or people who are in pay beds but paid for by the public, differently from the rest.
§ Baroness Masham of IltonMy Lords, is it not a fact that it is common practice for some health authorities to use the independent sector to clear some of their waiting lists? Therefore, should not those patients have the same protection as any other patient treated in National Health Service hospitals?
§ Viscount BridgemanMy Lords, I too rise to support the amendment. The noble Baroness, Lady Masham, has just made the point about the interdependence at all levels between the private and NHS sectors in the service. I speak as chairman designate of an independent charitable hospital. The independent sector is more regulated at present than the NHS. Nevertheless the sector very much welcomes the possibility of further accreditation. Most hospitals are already accredited under the King's Fund. This is an extension of that. It is a more public and transparent standard of which all patients can be assured so that, wherever they are treated, they will be treated to the same standards in all hospitals—private and national health.
§ Lord PatelMy Lords, not having been in your Lordships' House in Committee, I beg your Lordships' indulgence for speaking now. I have read the Hansard report of that debate and noted in particular the statement made by the Minister to which the noble Earl referred earlier.
There are many issues to be addressed in relation to the regulation of the independent sector. Not least of those is the registration and inspection to ensure that standards of service and practice are met and enforced.
836 There are other issues too and I shall refer in particular to those which mainly concern the medical profession. I believe that the public would expect that all doctors who provide care in the independent sector would have undergone the same level of training and assessment as those specialists who work in the NHS.
As has already been said, the vast majority of doctors who practise in the independent sector also hold consultant positions in the NHS. However, significant numbers do not. They should also be subject to the same regulatory processes, not only those of the General Medical Council but also of the other regulatory bodies, some of which have been mentioned; for example, the Royal Colleges. When I was chairman of the Academy of Medical Royal Colleges I was responsible for instituting the forum to which reference has been made. While it has had ongoing discussions, it has not resolved the issue.
In respect of the training of those who provide service in the independent sector, in my capacity as chairman of the specialist training authority I shall give evidence to the Select Committee.
There are other issues; for example, appropriate procedures relating to complaints and clinical governance. So yes, I agree with many of the things that have been said. We need regulation in the independent sector. I know that the independent sector would welcome a properly structured regulatory process established after consultation. I ask the Minister whether she will assure the House that an opportunity for the commission to have a potential role in the independent sector will not be missed if the amendment is not accepted at this stage.
§ Lord Walton of DetchantMy Lords, most of what has been said has covered the points that I wished to contribute to this short debate. Regulation of the independent sector is long overdue. Approximately 15 per cent. of the population of this country will now be covered by insurance for private medical care. I wholly agree that the majority of the doctors who work in the private sector and who give their services in private hospitals also hold consultant posts in the NHS; but there are some who do not.
When I was president of the General Medical Council, which is now more than 10 years ago, we had a number of serious concerns about small private institutions which were employing doctors who had not undergone a full programme of training in the NHS and who were not properly qualified to carry out in all respects the procedures which they were performing.
Some of those doctors came before the General Medical Council on disciplinary grounds. But it seemed to me that if there had been a proper statutory system of regulation to cover the whole of the independent sector, particularly those hospitals providing acute and specialist services, many of which give a quite outstanding quality of service to the community, problems of that nature would have been avoided.
Bearing in mind the report in The Times in which it was said that the Secretary of State proposes to regulate the private sector, would it not be best to have an 837 enabling clause in this Bill? When the Select Committee has reported and the Secretary of State has decided upon the kind of regulation that he wishes to recommend, would it not then be appropriate, under such an enabling clause, for those procedures to be introduced by regulation?
§ Lord WinstonMy Lords, I hesitate to detain the House, given that I heard a rumour that there may be a Division, and I know that no one wants to miss his tea. However, I have one or two questions for the Minister on this issue.
I work in an area of medicine where there is a huge amount of private practice. In fact, it is the area in which there is probably more private practice than any other sector because, sadly, it is not funded by the National Health Service to the extent that it might be. Consequently, we see a significant number of patients who have been treated in an unregulated way.
Of course, with regard to in vitro fertilisation, there is a Human Fertilisation and Embryology Authority which does a good regulatory job. I say that with some reservations. But it cannot regulate the whole of reproductive medicine because it is not empowered to do so. Therefore, for example, if a patient goes to a free-standing in vitro fertilisation clinic in the private sector, she and her husband are likely to get in vitro fertilisation even if it is not the most suitable treatment for the couple. There may be alternative, more effective treatments. That pattern is extremely common in the private sector.
Of course, the standard of private medicine in this country is high. Indeed, it is. But unfortunately there are places where standards are poor. Therefore, I wish to support what the noble Lords, Lord Walton and Patel, said. It is extremely uneven. There are occasions when people who would not be employable in the NHS are practising privately and carrying out surgical procedures about which we should have considerable concern. I see on a regular basis a number of patients who I feel have been badly damaged by some of those procedures.
I do not know whether this Bill is the vehicle to use to introduce such legislation. However, is there not a place for better regulation of the private sector in general? What does she intend to do about that? In many areas in private medicine there is extremely poor audit of what goes on.
The second question is as to what is the exact status of private medicine in NHS hospitals. A large number of hospitals, including my own NHS trust, need and do excellent private practice. I am not quite certain whether or not those patients will be covered by the Bill. If we contract out to a private hospital, those patients would still be NHS patients. Therefore, although the Minister will answer the question. I believe that the answer to the noble Baroness, Lady Masham, is that they will be covered. Lastly, it is not only fertility services which are concerned. For example, plastic surgery falls into that area which is not funded by the NHS. Therefore, there is a certain advantage in achieving evenness in the private sector. 838 Another reason for regulation is the fact, as has been pointed out by the noble Lord, Lord Walton, that a large number of patients are privately insured, mainly by BUPA and PPP. Often it seems they arbitrarily decide whether or not they will fund patients at a particular hospital, often to the detriment of patients who come to an individual doctor.
I believe that those are very poor decisions by the insurance companies. If there were an audit of what those hospitals were doing, there would be a yardstick by which one could say that a particular private sector hospital was doing a good job. Perhaps that might be looked at in legislation, although I accept that the Government may not see this Bill as the right one in which to do that.
§ 4 p. m.
§ Baroness McFarlane of LlandaffMy Lords, I rise to support the amendment, as many others have done. As far as concerns nurses, we are anxious that every patient should have the right to minimum standards of quality, care and safety, irrespective of the sector in which they are treated.
There is still a considerable amount of confusion regarding the Government's proposals on quality for the independent sector. Many important questions remain to be asked. We are still unclear, for instance, whether the duty of quality will apply to independent healthcare providers. Perhaps the Minister could give us an assurance on that. Her reply in Committee seemed to indicate that, but we were uncertain about the details of what she said. It is not clear whether the duty of quality will apply to the independent sector institutions.
We are also interested to have further clarification about how the commission will work to ensure that National Health Service-funded patients who receive their care in the independent sector will be guaranteed the same standards of care. We are conscious that the Government intend to consult on the future regulation of the independent healthcare sector. Without pre-empting the consultation, it would be good to have reassurances that the consultation will look at options for improving the regulation of independent healthcare and that deregulation is not on the agenda. Perhaps the Minister could give us information about the timescale for launching and completing that consultation.
As Amendment No. 47 stands, it seems that nursing homes would not be included. That gives me cause for concern. Perhaps we could have clarification about that as so many National Health Service patients are nursed in nursing homes.
§ Lord HarmsworthMy Lords, will the Minister, in her reply, help the House on the legal position of the Secretary of State in this matter? My memory is that the National Health Service Act 1946 makes no distinction between public and private sector health, but that the Secretary of State is responsible for the health, both physical and mental, of the people of England and Wales. Could the Minister tell the House how that fits 839 in to the amendment put forward by my noble friend Lord Howe, who raised this important legal point when he spoke?
§ Baroness BernersMy Lords, I also rise to support the Bill and the amendment tabled by the noble Earl, Lord Howe. I also agree with all the points put by other speakers. The general public needs to have confidence in the overall quality of both medical and nursing care throughout all sectors of health. I hope that the Government will feel able to put this amendment on the face of the Bill.
§ Baroness HaymanMy Lords, we have had an interesting follow up to the important debate that we had on these issues in Committee. Issues such as the regulation of the independent sector, whether the commission for health improvement has a role to play in the regulation and safeguarding of standards within that sector, and how we can ensure quality of services in the independent sector, which I fully accept are matters of responsibility, are all important.
I have no grave disagreement with the tenor of any of the contributions made in the debate today. The Government have made clear their recognition of the real concerns about the inadequacies of the existing regulatory structure. We should not pretend that there is no regulatory structure at all for the independent sector. It is regulated under the Registered Homes Act. It is a responsibility of health authorities and a responsibility of such authorities in regard to nursing homes—to take up the point made by the noble Baroness, Lady McFarlane—as well as to acute sector providers.
Much of this debate has been sparked off because we have a set of proposals before us for the regulation of the nursing homes sector. I suggest that the reason the noble Earl, Lord Howe's amendment does not extend to the nursing home sector is that he accepts, by implication, the need for a coherent and comprehensive look at registration, monitoring, inspection and sanctions in that sector, and I would argue that we need to do the same for the independent sector.
We need to ensure, and the Government have a duty to ensure, that independent healthcare services are appropriately regulated. We need to protect all members of the public. I take the point made in the debate that that includes private patients as well as patients in NHS hospitals. Perhaps I can clarify the position. It is important that patients who choose to use the independent sector are reassured that they receive services that are safe.
It is because of the concerns expressed about the various issues—the issues that the noble Lord, Lord Walton, raised, the issues about complaints procedures and the issues about whether the Registered Homes Act is too creaky a vehicle to do the job properly—that a Select Committee in another place is looking into those matters. Department of Health Ministers will give evidence to the committee after Easter. Officials have already done so.
840 As I have told the House, currently we are working on a consultation document to be issued shortly about regulation of the private sector in health. I want to assure the House that we do not take a minimalist view of regulation in this area. There are concerns that there has been too much framework and not enough flesh and bones in terms of the Registered Homes Act, and that we need to look carefully at standards of clinical care in that sector.
I also recognise the anxiety that the drive for quality in the NHS should have an effect in the private sector. I believe it will do so. The national institute for clinical excellence is not included within the Bill, but everything that it does will be publicly available. I recognise the desire—the noble Earl, Lord Howe, made this point— of the healthcare sector to improve standards and it will be able to access and take up the recommendations. The clinical governance guidance on quality in the NHS, published this week, is equally available. I am certain that those clinicians who work across the two sectors will bring their experience of clinical governance in the NHS into the private sector.
The strengthening of professional self-regulation under this Bill will apply to all professionals and will improve the protection of patients in the private sector as well as the NHS.
To those noble Lords who have said that we should act now and that in some way the Government are behaving less than responsibly in not doing so, perhaps I may say that it is my belief that the issues surrounding the improvement of regulation in the private healthcare sector justify a coherent approach and that the Government intend that such an approach will be the outcome of the consultation process on which we are about to embark.
The noble Lord, Lord Clement-Jones, somewhat chastised me for not giving assurances about the exact route that we intend to take or about exactly what model we shall adopt for the private sector. I suggest that I would equally be chastised if I pre-empted now the results of the consultation and of the Select Committee inquiry in another place about the right way forward. Equally, again, noble Lords should not assume that what is being done in the context of a managed health service for the NHS can be picked up wholesale, transposed into the private sector and give adequate protection across the whole range of issues.
It is clear that although we have responsibilities for patients receiving care in the private sector, their situation is different from that of NHS patients receiving care. The Government have a particular responsibility to NHS patients—I am talking about responsibilities under the 1977 Act—as a result of being a provider of national health services. The Government's responsibility to private patients and private establishments is as a regulator of the independent care sector. We must ensure that we have the appropriate mechanisms and systems for ensuring that standards in both are coherent, comprehensive and enforceable.
It is clear that a regulatory system for the independent healthcare sector would need to exercise three broad functions: a licensing or registration function, a 841 monitoring or inspection function, and an enforcement function. Those elements cannot be dealt with in isolation. An inspection might reveal unacceptable standards which call for sanctions. Those might relate to the continuation of registration. That is not an area in which the commission—if that was the body that found things wrong—would be able to take action. That is a serious concern. It is different in the National Health Service because the Secretary of State can take action either by direction or by removing the chairman of the institution concerned. The Secretary of State has direct responsibility.
If we are to put responsibilities on to the private sector, we have a responsibility for ensuring that there is an enforcement mechanism. It is salutary to take the example of the nursing home sector. The Government have proposed to establish regional commissions for care services, as set out in the White Paper, Modernising Social Services. That is an example of the range of functions needed in any statutory regulation system. The commissions will deal with a range of care services, including nursing homes.
Perhaps I may use nursing homes as an example of how the commissions will carry out their task. The commissions will have to register nursing homes, setting out specific conditions, criteria and standards that must be met before registration is given. That is, in effect, a licence to trade, and it will be unlawful for a nursing home to operate without having a registration with the commission for care standards. The commissions will also have to monitor and inspect nursing homes, both on a routine basis and in response to any concerns or allegations. The aim of those inspections will be to demonstrate that registration conditions and standards are continuing to be met. The commissions will also have to take enforcement action against a nursing home that is failing to meet the required standards. That would include serving improvement notices, prosecuting through the courts for specific offences and, if necessary, deregistering the nursing home, causing its closure.
The commissions for care standards will therefore have the power to control entry to the market and to take out of operation any providers that are not up to standard. Those statutory powers and procedures are essential to proper registration. Inspection—the role of the commission—is not the only or even the crucial part of the system when we are dealing with a commercial operation rather than with the NHS government-managed system.
However, the commission for health improvement, which we are setting up under this Bill, is not a regulator. We have not designed the commission and the duty of quality to fit that model. The commission monitors standards, but it does not have enforcement powers. That will be a matter for the NHS and, if necessary, the Secretary of State through directions under Clause 7. However, the Secretary of State's general ability to issue directions does not extend to the private sector, so under this amendment there is no way of enforcing the commission's recommendations.
842 I take the point raised by the noble Lord, Lord. Skelmersdale, and I understand that in this amendment noble Lords have tried to take on board the fact that this might not be the way forward. However, I believe that if we "pick and mix" the provisions for regulation and legislate now, we shall probably get it wrong and would have to relegislate in the future.
Perhaps I may give the noble Lord a couple of examples and I shall then give way to him. We are giving the commission powers to inspect but without any sanctions or powers of enforcement. We would have to consider an appeals mechanism if, for example, sanctions were involved. We have to recognise that that is designed to fit in with the NHS systems and that we need to design a system that fits what is in one way a market transaction. I quite understand that the service being bought is of crucial importance and that we must safeguard standards within it. That applies in this area more than to many other services. However, we are not talking about the same situation as in the NHS—
§ Lord SkelmersdaleMy Lords, I am grateful to the Minister for giving way. I readily accept what she says, but she is not being asked to legislate now; she is being asked to put on the statute book what one might call a "delayed fuse timebomb", so that should the government of the day, at a particular time in the future, wish to activate it, they can. If they do not wish to activate it, it remains on the statute book and is not activated. It is as easy as that.
§ Baroness HaymanMy Lords, what I am saying is that, as legislators, we should not legislate at the wrong time and with something that might explode in our face. We should try to get it right.
Perhaps I may point out why I think that we might want to take a number of potential approaches to the regulation of the private sector. One suggested option is that the commission for care standards, which I have just described and which will deal with nursing homes, could be extended to cover registration, inspection and enforcement in the independent care sector. Another option might be to set up a parallel, completely separate body that focuses only on the more acute end of independent healthcare. Another option might be a registration body which contracts with another body to provide a monitoring or inspection function. I should acknowledge that, if that model were adopted, any regulator of independent healthcare might want to take advantage of the particular expertise of the commission of health improvement. There might be a certain synergy between the responsibilities of the regulator and the work of the commission in the NHS.
National Health Service patients in the private sector will be covered by the work of the commission. We will be saying to health authorities that in any contracts that they have with the private sector they must deal, first, with the quality standards and, secondly, not award contracts except with provision for inspection by the commission for health improvement. That is an interesting example of having to use the contract mechanism. Because one is dealing with the private and independent sector, cover cannot be automatic just 843 because NHS patients are being treated. In the same way, pay beds and private beds in NHS institutions will be covered by the commission and by clinical governance because, in all their activities, those institutions will be subject to the framework.
I am not ruling out the possibility that the commission might be given some responsibilities in the future. I am trying to explain to the House that there are a wide range of options that we might take forward. I understand that many people feel that the commission might pre-eminently have a role to play and I undertake to the House that we will consult specifically on this point in the consultation document that will be published. We hope that it will be published soon; we hope to be able to complete the consultation over the summer. There is therefore no question of kicking this into the long grass.
However, if we chose to go down that route, we would have to look at the relevant clauses of this Bill that we wanted to apply in some way to the independent sector. We would need to make available the appropriate legislative time at that point. But I understand the concerns expressed that regulation of the independent sector should not be allowed to fall down a crack between the current Bill and any future legislation to implement the proposals in the Government's White Paper Modernising Social Services. I offered some thoughts on this issue at Committee and I hope that what I can say today provides further reassurances that the Government believe this issue to be too important to let that happen.
Any legislative follow-up on the social services White Paper on the regulation of independent social healthcare would of course involve a fundamental revision of the Registered Homes Act 1984. That piece of legislation also governs the regulation of the independent acute sector. Noble Lords will understand that no Minister can give an absolute guarantee of the timing of legislation beyond that which is in the Queen's Speech. But it is our clear intention that any legislation we bring forward to implement our plans set out in the White Paper should be wide enough also to address the sorts of issues that we are discussing today. In that legislation we could make any appropriate consequential amendments to the Bill before us today.
I am absolutely clear in my view that we will not, somehow, miss the boat if we do not include provisions in the current Health Bill. However, it would be precipitate to adopt the amendment as it stands at the moment for two reasons. First, it is anticipating the result of a debate which is not one promised for some time in the future, but one that is ongoing and will come to clear conclusions. Secondly, if we go down this route, we put in place fragments of a system. The whole tenor of the debate this afternoon has been that we need a system that is coherent, comprehensible and enforceable and that it is worth waiting to get it right.
Earl HoweMy Lords, I am grateful to the Minister. Before I respond at any length, perhaps I can seek one point of clarification. Do I understand her to say that the Government are committed in principle to a common set of quality standards for 844 both the NHS and the independent sector? That sort of commitment would be important for both sectors to hear, if that is the general thrust of what she is saying. I do not mean to tie her down to any details, but commitment to a common set of quality standards for both is an important principle.
§ Baroness HaymanMy Lords, the noble Earl cannot expect me to commit the Government as to quality standards that private providers will offer people who are buying services from them. I cannot say whether the private sector will offer single rooms or wards of 20 beds. It is not my responsibility to do so.
On the broad issue of regulation of standards of quality within the private sector—perhaps going beyond the bricks and mortar issues to some of the skeletal issues that have been dealt with in the past—I cannot deliver the commitment required because I have no mechanism of enforcement and no mechanism for stopping people offering services for sale other than those which are safe and to standards which are safe. The noble Earl cannot expect me to take on responsibility for standards of quality across the board and in the wider sense within the private sector. It is a hard enough responsibility to take it on for the NHS.
Earl HoweMy Lords, the last part of the noble Baroness"s answer was singularly disappointing; it almost spoilt what she said before. I was not asking about the ability to enforce standards. As the House will recognise, this is an amendment which gives an enabling power only. My question related to standards as a whole, not whether patients should have a single room or bacon for breakfast. We are talking about the standards of medical and clinical care in general terms.
§ Baroness HaymanMy Lords, that is precisely my point. The noble Lord is talking very broadly of quality standards. I am saying that there is a whole range of quality standards and it would be absolutely wrong for me, at the Dispatch Box, to say now that the Government are taking on responsibility for that. We certainly take on responsibility, through professional bodies strengthening self-regulation, for the quality standards of the people who are working in those organisations. But the noble Earl cannot expect me to take complete responsibility for all of the standards delivered within the private sector. That is a different responsibility. As I was trying to point out earlier, the responsibility as regulator is different from the responsibility as provider.
Earl HoweMy Lords, again I find that answer disappointing. I was with the noble Baroness almost all the way in her main reply. I could see that what she was saying made a great deal of sense. But I am afraid the Government are in a bit of a bind. First, the noble Baroness has not really taken on board the point made not only by me, but by other noble Lords, that the Secretary of State has a duty to promote the health of the nation. That is a clear duty on him. To me that 845 implies that, if she promotes quality standards in the NHS, then, ipso facto, those quality standards should be good enough all round. That sort of commitment is one that I hoped to hear from her.
§ Baroness HaymanMy Lords, I give the commitment to promote the health of the nation across the board. Health promotion will be given to everybody in exactly the same way. I give the same commitment to any NHS patient to whom we are providing services, whether in the private or public sectors. However, I cannot take on responsibility for the services that private contractors provide to someone who contracts with them in the same way as I can for the services provided by the NHS.
§ Lord Walton of DetchantMy Lords, with the leave of the House, may I ask the Minister a question about the point that has been put very clearly by the noble Lord, Lord Howe? I am sorry, it has just been pointed out to me that I cannot do so.
Earl HoweMy Lords, I realise that I have asked the Minister to rise to her feet to respond quite a few times. I am grateful to her for what she has said. I apologise to the House in that I was out of order in that respect.
Nevertheless, I believe that the Government are in a bit of a bind over this for another reason. They are saying that the functions of the commission will extend to independent hospitals but only as far as the patients who are being treated there under the NHS. That seems to me to be an extraordinary position to take. It implies that what a private hospital does is of little concern, except when there happen to be NHS patients in it. That exemplifies the artificiality to me of the public/private divide about which I spoke earlier.
The Minister talked about taking the opportunity in future legislation to do this. I welcome what she said about taking an early opportunity to legislate, and I accept that the Government have a commitment to do so. But I wonder whether a future Bill covering social care is at all the right place in which to try to regulate the independent hospital sector. These hospitals have little or nothing to do with social care; indeed, they are sophisticated providers of healthcare delivering a huge range of acute and elective treatments. They are not long-stay institutions for the chronically sick and elderly. There does not seem to me to be a very good fit there.
We all look forward to reading the consultation document when it is issued and look forward to the results of that consultation. I do not want the Minister to pre-empt that exercise or, indeed, the findings of the Select Committee in another place. I agree with her in that it may not be appropriate to transpose the framework set out in the Bill in its entirety on to the private sector. That is why the amendment allows for a kind of mix and match approach if that is what the Secretary of State chooses to do.
The way to achieve coherent standards is, in my estimation, to make the duty of quality apply across the board. That is all that this amendment suggests. I recognise that the commission's remit would not 846 provide a complete range of enforcement functions but, in a sense, no one ever said that it would. It is part of a continuum of clinical governance which needs to be put in place. It is being put in place as regards the NHS, and I dare say that there will be other elements that need to be found that are appropriate to the private sector.
I am in difficulty over this issue. I recognise the strength of the points made by the Minister. When the noble Baroness was half way through her response I felt that I owed it to her to reflect further on what she had said because there were some extremely powerful points in it. However, I am somewhat dismayed and a little deterred by the latter part of her answer. Therefore, although I recognise that the Minister has gone to a great deal of trouble to respond to the concerns that have been raised this afternoon, I believe that this is an issue which would benefit from taking the view of the House.
§ 4.33 p. m.
§ On Question, Whether the said amendment (No. 47) shall be agreed to?
§ Their Lordships divided: Contents, 161; Not-Contents, 113.
847| Division No. 1 | |
| CONTENTS | |
| Aberdare, L. | Elliott of Morpeth, L. |
| Addington, L. | Elton, L. |
| Ailsa, M. | Ezra, L. |
| Alexander of Tunis, E. | Falkland, V. |
| Anelay of St. Johns, B. | Ferrers, E. |
| Annaly, L. | Foley, L. |
| Archer of Weston-Super-Mare, L. | Fookes, B. |
| Ashbourne, L. | Forbes, L. |
| Astor of Hever, L. | Gisborough, L. |
| Attlee, E. | Glanusk, L. |
| Beaumont of Whitley, L. | Glasgow, E. |
| Berners, B. | Glentoran, L. |
| Blackburn, Bp. | Goodhart, L. |
| Blaker, L. | Haig, E. |
| Blatch, B. | Halsbury, E. |
| Blyth, L. | Hamwee, B. |
| Boardman, L. | Hanningfield, L. |
| Brabazon of Tara, L. | Harding of Petherton, L |
| Bridgeman, V. [Teller.] | Harlech, L. |
| Broadbridge, L. | Harris of Greenwich, L. |
| Brougham and Vaux, L. | Henley, L. [Teller.] |
| Buckinghamshire, E. | Higgins, L. |
| Cadman, L. | Holderness, L. |
| Campbell of Alloway, L. | HolmPatrick, L. |
| Carlisle, E. | Hooper, B. |
| Carnegy of Lour, B. | Howe, E. |
| Charteris of Amisfield, L. | Hunt of Wirral, L. |
| Chesham, L. | Hylton-Foster, B. |
| Chilver, L. | Ilchester, E. |
| Chorley, L. | Inglewood, L. |
| Clement-Jones, L. | Jacobs, L. |
| Colwyn, L. | Kitchener, E. |
| Cranbome, V. | Knollys, V. |
| Cullen of Ashbourne, L. | Lamont of Lerwick, L. |
| Dacre of Glanton, L. | Lane of Horsell, L. |
| Davidson, V. | Lauderdale, E. |
| Dholakia, L. | Lindsey and Abingdon, E |
| Dixon-Smith, L. | Long, V. |
| Downshire, M. | Lucas of Chilworth, L. |
| Eames, L. | Ludford, B. |
| Ellenborough, L. | Luke, L. |
| Elles, B. | McConnell, L. |
| Macleod of Borve, B. | Renwick, L. |
| McNair, L. | Rodgers of Quarry Bank, L. |
| Maddock, B. | Rowallan, L. |
| Malmesbury, E. | Russell, E. |
| Mar and Kellie, E. | Ryder of Warsaw, B. |
| Marlesford, L. | St Davids, V. |
| Masham of Ilton, B. | St John of Fawsley, L. |
| Mersey, V. | Saltoun of Abernethy, Ly. |
| Methuen, L. | Sandberg, L. |
| Miller of Hendon, B. | Sharp of Guildford, B. |
| Milverton, L. | Shaw of Northstead, L. |
| Montgomery of Alamein, V. | Skelmersdale, L. |
| Mountevans, L. | Skidelsky, L. |
| Moyne, L. | Smith of Clifton, L. |
| Munster, E. | Soulsby of Swaffham Prior, L. |
| Murton of Lindisfarne, L. | Steel of Aikwood, L. |
| Napier and Ettrick, L. | Stockton, E. |
| Naseby, L. | Strathcarron, L, |
| Newall, L. | Strathclyde, L. |
| Newby, L. | Sudeley, L. |
| Northesk, E. | Swinfen, L. |
| Norton, L. | Taverne, L. |
| Onslow, E. | Teviot, L. |
| Oppenheim-Barnes, B. | Thomas of Gwydir, L. |
| Oxfuird, V. | Thomas of Walliswood, B. |
| Palmer, L. | Thurso, V. |
| Park of Monmouth, B. | Tope, L. |
| Pender, L. | Trefgame, L. |
| Pike, B. | Trenchard, V. |
| Plummer of St. Marylebone, L. | Trumpington, B. |
| Poole, L. | Vivian, L. |
| Rankeillour, L. | Wade of Chorlton, L. |
| Rawlings, B. | Westbury, L. |
| Razzall, L. | Wharton, B. |
| Reay, L. | Wilcox, B. |
| Redesdale, L. | Winchilsea and Nottingham, E. |
| Renton, L. | Wise, L. |
| Renton of Mount Harry, L. | Wynford, L. |
| Young, B. | |
| NOT-CONTENTS | |
| Acton, L. | Fitt, L. |
| Ahmed, L. | Gainsborough, E. |
| Allenby of Megiddo, V. | GladwinofClee, L. |
| Alli, L. | Gordon of Strathblane, L. |
| Amos, B. | Goudie, B. |
| Archer of Sandwell, L. | Gould of Potternewton, B. |
| Ashley of Stoke, L. | Graham of Edmonton, L. |
| Bach, L. | Grenfell, L. |
| Bassam of Brighton, L. | Hacking, L. |
| Berkeley, L. | Hanworth, V. |
| Blackstone, B. | Hardie, L. |
| Borrie, L. | Hardy of Wath. L. |
| Bragg, L. | Harris of Haringey, L. |
| Brooke of Alverthorpe, L. | Haskel, L. |
| Brookman, L. | Hayman, B. |
| Bruce of Donington, L. | Hilton of Eggardon, B. |
| Burlison, L, | Hollis of Heigham, B. |
| Carew, L. | Howie of Troon, L. |
| Carter, L. [Teller.] | Hoyle, L. |
| Christopher, L. | Hughes, L. |
| Clarke of Hampstead, L. | Hughes of Woodside, L. |
| Cocks of Hartcliffe, L. | Hunt of Kings Heath, L. |
| Crawley, B. | Irvine of Lairg, L. [Lord Chancellor.] |
| David, B. | Janner of Braunstone, L. |
| Davies of Oldham, L. | |
| Desai, L. | Jay of Paddington, B. [Lord Privy Seal.] |
| Diamond, L. | Jeger, B. |
| Donoughue, L. | Jenkins of Putney, L. |
| Dubs, L. | Judd, L. |
| Eatwell, L. | Kennet, L. |
| Emerton, B. | Kintore, E. |
| Evans of Watford, L. | Laming, L. |
| Falconer of Thoroton, L. | Lawrence, L. |
| Farrington of Ribbleton, B. |
| Levy, L. | Randall of St. Budeaux, L. |
| Lockwood, B. | Rea, L. |
| Longford, E. | Richard, L. |
| Lovell-Davis, L. | Rogers of Riverside, L. |
| Macdonald of Tradeston, L. | Sainsbury of Turville, L. |
| McFarlane of Llandaff, B. | Shannon, E. |
| Mclntosh of Haringey, L. [Teller.] | Shore of Stepney, L. |
| Mackenzie of Framwellgate, L. | Simon, V. |
| Milner of Leeds, L. | Simon of Highbury, L. |
| Molloy, L. | Stallard, L. |
| Monkswell, L. | Strabolgi, L. |
| Montague of Oxford, L. | Symons of Vernham Dean, B. |
| Morris of Castle Morris, L. | Tenby, V. |
| Morris of Manchester, L. | Thornton, B. |
| Nicol, B. | Tomlinson, L. |
| O'Neill of Bengarve, B. | Turner of Camden, B. |
| Patel, L. | Uddin, B. |
| Pitkeathley, B. | Walton of Detchant L. |
| Plant of Highfield, L. | Warner, L. |
| Ponsonby of Shulbrede, L. | Weatherill, L. |
| Prys-Davies, L. | Wedderbum of Charlton, L. |
| Puttnam, L. | Whitty, L. |
| Ramsay of Cartvale, B. | Williams of Elvel, L. |
| Winston, L. |
§ Resolved in the affirmative, and amendment agreed to accordingly.
§ 4.44 p. m.
§ Clause 19 [Co-operation between NHS bodies]
§ [Amendments Nos. 48 and 49 not moved.]
§ Baroness Pitkeathley moved Amendment No. 50:
§ After Clause 20, insert the following new clause—
§
HEALTH AUTHORITIES TO ASSIST WITH COMMUNITY CARE ASSESSMENTS
(". —
(3A) A Health Authority whose help is so requested shall comply with the request if it is compatible with its own statutory duties and obligations and does not unduly prejudice the discharge of any of its functions. "").
§ The noble Baroness said: My Lords, this amendment is a modified version of one that I put forward in Committee. It seeks to place a duty on a health authority to assist a local authority in carrying out a community care assessment if—that is an important if—the local authority requires such assistance, and if complying with such a request is compatible with the health authority's duties and does not unduly prejudice the health authority's functions. There is a similar provision for co-operation between agencies in the Children Act 1989.
§ Section 47 of the National Health Service and Community Care Act 1990 requires local authorities to invite health authorities to assist in the assessment of an individual's needs where it appears to a local authority that an individual has health needs. This amendment would require a health authority which has been asked to do this by a local authority, to assist in the assessment if providing such assistance would be in accordance with the health authority's functions. Thus the 849 amendment does not place a duty —I must emphasise this —on health authorities to be involved in every community care assessment. However, there will be cases where the assessment of a person's health needs will be an essential part of a local authority's community care assessment. For example, a person with learning disabilities and mental health problems may have complex needs and the assessment of such needs will require input from health professionals working with their colleagues in social services. I believe this measure would give government another mechanism by which they can ensure closer working between these two bodies. I know the Government are committed to that.
§ The amendment is necessary in my view because while Section 47 of the National Health Service and Community Care Act places a duty on local authorities to invite health authorities to assist in a community care assessment where they believe that a person has health needs, there is no corresponding duty on health authorities to assist, as they have been requested. Thus, if health authorities fail to assist in such assessments, there is no mechanism requiring them to do so. The section states that the local authority —that is usually social services —will, when making the assessment, take into account any services that are likely to be made available by the health authority. If the health authority refuses to co-operate —I accept that those occasions would be few —the local authority's ability to carry out an effective assessment will be undermined and as a result the user, and possibly the carer, will suffer.
§ Failure to provide a comprehensive, multi-disciplinary assessment can lead to a deterioration in the health of the individual. This amendment would therefore support the Government's aims in providing a more public health oriented agenda. This amendment has the support of the Local Government Association, the Association of Directors of Social Services, the Law Society, the Carers National Association, the Alzheimer's Disease Society and many others. Its aim is to underpin existing policy and guidance on community care. The expectation that health authorities will be involved in community care assessments where necessary has been made clear in a number of government documents relating to community care. I beg to move.
§ Baroness Thomas of WalliswoodMy Lords, I rise briefly to support the noble Baroness, Lady Pitkeathley, in this new version of her former amendment. As she has just explained to us, she has removed one of the major objections to the original amendment which the noble Lord, Lord Hunt of Kings Heath, brought forward on the second day of the Committee stage. The sooner the health service in general is brought into the process of assessing a client's need —someone who is receiving social services help is called a client —the better.
If we are to go down the road foreseen by the report of the Royal Commission on long-term care the health service has to begin to understand that what it does at the earlier stages of the deterioration in, say, the health of an elderly person will have a great deal of bearing on the costs of that care if the elderly person becomes more disabled than might otherwise be the case. The earlier 850 the health service is brought into the care of elderly people the better it will be not only for the elderly person but for the health service. For that reason, I shall be extremely interested in what the Minister has to say in response to the amendment.
§ Lord LamingMy Lords, I also support the thrust of the amendment. I am sure that your Lordships will agree that in recent years many demands have been placed on local authorities to respond to the requests from health authorities to meet the needs of a wide range of patients, clients or users of services, however they are described. These requests have been not only to respond to need but to respond very speedily. That must be a two-way process. Local authorities and health authorities are separate corporate bodies and the amendment seems to go with the grain of the Government's commitment to a duty of partnership, which is to be welcomed. Good health care can be undermined by poor social care, but good social care can also be undermined by poor health care. In this context, "poor" generally means delay and failure to respond. I hope that the Minister will consider carefully the thrust of the amendment.
§ Baroness Masham of IltonMy Lords, I heard on Radio 4 this morning that 3, 000 elderly people's beds have been closed. Rehabilitation beds are also being closed. Professor Millard said in his report that there was a Berlin wall between health and social service. There needs to be a smooth transition between hospital and home for seriously ill patients. It should always be the aim to get patients back to their own homes, but if they are elderly, frail or seriously disabled good quality care with adequate support in the community is vital. After anaesthetics, elderly people can become disorientated. They often take longer to get better than younger people and there is such pressure on hospitals that they are put out into the community rather too quickly. Health and social services should work together for the common good of patients; they should build common teams. But it is difficult. They have different budgets, different ways of working and even a different language.
There was an occasion when there was an argument between health and social services about who should wash a patient. It was decided that the upper end of the patient was the responsibility of social services and the bottom half of the patient was the responsibility of the health service. That is totally ridiculous. If there were co-operation with assessments there might be co-operation over care. I support the amendment.
§ Lord Hunt of Kings HeathMy Lords, we return to a very important issue which was raised by my noble friend at Committee stage. I have listened with great interest to the contributions of noble Lords who have spoken in the debate. I very much agree that the spirit of partnership that is required between the NHS and local government is essential to developing services in the way we wish and for avoiding some of the points and issues that the noble Baroness, Lady Masham, has brought to our attention. I do not think that there is anything between us when it comes to the need to tackle those issues. The question is how best to do it.
851 Since your Lordships discussed this matter in Committee we have given the issue further consideration. We have taken on board the concerns that were expressed that, where an individual is identified as requiring a health assessment during his community care assessment that assessment, in a minority of cases, is not taking place. That is a genuine concern which we believe has to be addressed.
We have already taken some action to deal with the problem. Last year the Social Services Inspectorate carried out a special study of multi-disciplinary assessments and we have now commissioned work to follow this up to develop a self-audit tool for authorities. We believe this will help authorities to address local problems in partnership at the local level.
I mentioned at the Committee stage that our Better Services for Vulnerable People initiative set out the requirement for health and local authorities to develop a framework for multi-disciplinary assessment. The first joint investment plans developed under this initiative will address the needs of older people. From April 2000 joint investment plans will cover the full range of client groups. We will issue guidance on the development of joint investment plans to help authorities work up their plans for services from April 2000. I am pleased to confirm that we will, in this guidance, require health and local authorities to set out how they will work together to ensure that all the assessment needs of individuals are met.
My noble friend will appreciate that we welcome the spirit of the amendment but we believe that it would not solve the problem which it seeks to address. These are local problems which require local solutions. We must ensure that local partners deal with the underlying causes of the problems. We will make sure that this happens through our work on the better services for vulnerable people initiative. We are committing ourselves to ensuring, through guidance, that health and local authorities work together to address these issues as they develop their joint investment plans for April 2000.
Finally, I wish to refer back to the point I raised in Committee that the Secretary of State has a power under Section 17 of the 1977 Act—inserted by Clause 7 of the Bill—to direct health authorities, NHS trusts and primary care trusts to provide services. Where NHS bodies have failed to act in partnership as required by the provisions in this clause of the Bill; where they have failed to follow guidance on developing joint investment plans; and where NHS bodies appear to be acting unreasonably in failing to provide an assessment when required to do so by a local authority, we will have no hesitation in using this power.
I hope that your Lordships will understand that therefore the right way to deal with this problem is to address its causes at ground level. I believe that I have set out today our commitment to a clear programme of work to deal with this problem. On that basis, I hope that my noble friend will consider withdrawing her amendment.
§ Baroness PitkeathleyMy Lords, I am most grateful to my noble friend both for his reply and for the extra 852 consideration he has given to this important amendment. I am grateful also for the support of other noble Lords from around the House. I thank him for his commitment to putting a requirement for this co-operation in the guidance which will be issued. I am confident that that, together with the willingness to work together with local authorities, will address this issue. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 21 [Plans for improving health etc.]:
§ Baroness Thomas of Walliswood moved Amendment No. 51:
§
Page 16, line 10, at end insert—
("( ) Health Authorities shall, before drawing up any plan under this section, consult key partners in the delivery of NHS healthcare and the promotion of health. ").
§ The noble Baroness said: My Lords, this amendment is very similar to Amendment No. 138 which was moved at the Committee stage. At that time the amendment was criticised by a number of noble Lords for what one might call its "shopping list" aspect. We withdrew it and said that we would think again. On the other hand, a number of noble Lords felt that it was a useful requirement to place on the face of the Bill; that is to say, that it would be desirable to require health authorities to consult "key partners" prior to drafting health improvement plans.
§ There have been objections to the expression "key partners" in the context of other amendments during the course of this Report stage. It is used in an attempt to describe in the most general of terms those bodies of all kinds which in any local circumstances should be regarded as the most important people to consult. It is very difficult to find a phrase that does that and so we have stayed with "key partners". As those key partners may not be exactly the same consultee organisations in every geographical area (or, for that matter, for every part of the health improvement plan), we believe that such a requirement should be on the face of the Bill.
§ The noble Lord, Lord Hunt of Kings Heath, in responding to my noble friend Lady Sharp, said, as many of us know from our own personal experience, that the health service has not been notable for the skill and depth of its consultation processes in the past. It is for that reason that we would like a general requirement of this kind on the face of the Bill, which is such an important Bill for the health service.
§ 5 p. m.
§ Lord Hunt of Kings HeathMy Lords, again the noble Baroness has raised a very interesting point. I shall start by acknowledging what she said in repeating my words about the track record of the NHS in consultation in the past. One can look back— probably to 1974—to when governments of various shades issued instructions, circulars and guidance to the health service, which made it pretty clear that it needed to consult with all and sundry about any significant changes in services. Indeed, I go further and say that the health service can show that it consults with many organisations whenever it is faced with a difficult issue. The problem is that it has adopted a "tick box" 853 mentality. The general approach has often been first to decide what it wants to do, then consult and then make marginal changes.
We return to the point about health improvement programmes. I believe that they do not have any hope of succeeding in the way we want them to succeed unless they engage in real consultation and partnership with organisations and the local community. Noble Lords will realise that I very much take the message of the noble Baroness. We want to see not merely consultation but active engagement and participation by local stakeholders in the health improvement programme process and we want to see them as real partners with the health service.
Having said that, I am not convinced of the case forputting this provision on the face of the Bill. I acknowledge that the amendment before us avoids the dangers of shopping lists which we referred to in Committee, but it still leaves us with the problem of how key partners should be defined and by whom. There may be uncertainty about whether the definition of the clause is broad enough to cover all those we envisage being part of the process. Is it broad enough, for instance, to cover the recipients of health care, partners in the delivery of social care, partners in research and development, partners in education, training and in workforce planning?
We certainly know what we mean by way of partner involvement in the health improvement programme process. That is common ground between us. Let me stress again that we are committed to ensuring that this develops in practice. We are requiring that each health improvement programme includes a statement of who has been involved, how they have been involved and plans to develop the arrangements for the future. We shall expect NHS regional offices to pool that information on the first round. That will enable us to identify problems in development needs and ensure that they are addressed in future rounds.
We also have it in mind to pursue the theme of involvement in the research we mean to commission on implementation of the health improvement programme process to help identify and disseminate good practice. We have already challenged the health action zones to make good progress on widening and deepening local partnerships. We will be looking to draw early lessons about their experience. I believe that action of that sort will be more productive in securing full involvement of all the key players, including the appropriate consultation, than attempting to write a general requirement on the face of the Bill.
I would say to the noble Baroness, as we discussed in Committee, that Clause 21 includes a power of direction which we can use if we need to target particular issues of involvement. I believe that that combination of clear policy and intention, active monitoring, development and dissemination of good practice, backed by a power of direction which is available to us to target any 854 particular difficulty, offers a comprehensive package. On that basis, I ask the noble Baroness to withdraw her amendment.
§ Baroness Thomas of WalliswoodMy Lords, I should like to thank the Minister for a very full and well directed answer. Anyone reading Hansard tomorrow (which after all is a record of intent) will be in no doubt as to what the Government have in mind for the consultation process. I was particularly interested in the ideas and dissemination of best practice. Experience in many other fields shows that that is one, of the best ways of getting a change of habit or culture. With that I am very happy to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Baroness Hayman moved Amendment No. 52:
§ Page 17, line 21, leave out ('13") and insert ("13(4)").
§ On Question, amendment agreed to.
§ Clause 24 [Arrangements between NHS bodies and local authorities.]
§ Earl Howe moved Amendment No. 53:
§ Page 19, line 1, after ("the") insert ("social services departments of).
§ The noble Earl said: My Lords, one. of the creative features of this Bill, for which I give the Government full marks, is Clause 24, the provisions of which will allow the NHS and local authorities to work much more closely together than hitherto in areas where there is a commonality of interest. Joint working is, of course, nothing new either to the NHS or to local authorities, but the current legal barriers are such as to preclude the kinds of practical day-to-day arrangements that are conducive to maximum efficiency in the use of resources.
§ Clause 24 contains some important new powers which will allow the NHS to delegate functions to local authority departments and vice versa. They will allow for the provision of health and local authority services by a single managed provider, and they will allow for the pooling of money. Perhaps the obvious area where these arrangements will make a difference is that of delayed discharges from hospital, the causes of which, as noble Lords will be aware, are far from straightforward but can very often be traced to a lack of co-ordination between hospitals and social services. Greater flexibility in this sense is bound to pay dividends.
§ The amendment I have tabled is therefore for clarification. As Clause 24 is worded it would appear possible for the Secretary of State to allow for pooled budgetary arrangements between a health authority and a local authority if he feels that such a pooling of funds would assist in the delivery of health-related services. My first question to the Minister is exactly what that means. The functions of a local authority that are health related include practically all of its functions. Spending money on treating damp in the walls of a school classroom could be seen as health related. The same 855 might apply to free school milk, council house repairs, waste management, cleaner public transport, road maintenance—and the list goes on.
§ If NHS money is allowed to support the wider public health agenda, I should have real concerns about seeing a reduction in the money devoted to patient care. Can the Minister reassure me that the phrase, "health-related functions", in subsection (8) are those areas of local authority activity such as social services which are intimately bound up with patient services as delivered by the NHS?
§ My second concern relates to accountability. We are told that once money goes into a pool it ceases to possess a health or local authority identity. If that is so, how will it be possible to maintain proper accountability for the way in which health or local authority funds are used, and who will be the person accountable? My hope is that, despite health money losing its identity in the pool, the chief executive of the health authority will still be answerable for its use. It would not be satisfactory if the loss of the money's health identity were allowed to dilute or confuse the normal accountability mechanisms that ensure financial propriety. I beg to move.
§ Lord ReaMy Lords, when first reading the amendment I thought how restrictive it was. Having praised the purposes of Clause 24, the noble Earl has now included wording that restricts the provision to social services. I understand now that his purpose was simply to allow my noble friend the Minister to expand on how the clause will work, and I welcome that.
I take the noble Earl's point that every department run by a local authority could have a health-related aspect. However, there are particular areas in certain departments which could well be thought of as helping in the delivery of personal health services. I am thinking particularly of housing and education as front runners. But, as the noble Earl says, there are many other functions. I shall be extremely interested to hear how my noble friend will describe how the extent of the spread of NHS funds through local authorities will be managed.
§ Lord LamingMy Lords, many of the new unitary authorities have introduced structures which, although their social services functions are clear, are not all conducted in departments that are called social services departments. Many of the new unitary authorities have introduced structures where children's services are linked with education, and where adult services are linked with other functions such as housing, environmental health and the like.
§ 5.15 p. m.
§ Lord Hunt of Kings HeathMy Lords, that was a helpful intervention.
I welcome the opportunity to debate this issue and to clarify some of the points that the noble Earl has raised. I also accept the positive comments he made about the need to oil the wheels of collaboration between health and local government. When one thinks of NHS/local 856 government relationships, one thinks first of social services. I have no doubt that that will continue to be of prime importance. However, there are areas in the services offered to the public by local authorities where they can have a real impact on health-related issues. The arrangements that the Government are putting in place will allow us to take advantage of that, albeit with the safeguards in place which I believe the noble Earl would support.
We have an ambitious agenda for the future of the health service. Underpinning that agenda is the need to tackle the root causes of ill health and to improve services from the point of view of users and carers by breaking down the barriers that exist between organisations. That must go wider than purely health and social services barriers. In order to achieve that, we wish to have the greatest degree of flexibility in the use of resources. We want local partners to be able to develop "joined-up" solutions to "joined-up" problems.
The Government are committed to breaking down barriers. I point to the work of the Social Exclusion Unit, the Better Government initiative and the proposals in Partnership in Action as evidence of our commitment. This amendment would tie our hands. We want to allow partnerships to develop between NHS bodies and local authorities as a whole. Failure to do so would mean the isolation of social services within local government. It would mean that the needs of some of our most vulnerable citizens would not be met in the most effective way. We want to allow education and housing to work in partnership with the NHS to meet the needs of vulnerable people.
If this amendment were to be accepted, local partners would not be able to put in place improved support for children with special educational needs as regards the provision of speech and language therapy in schools, or better co-ordination and sharing of responsibility for the provision of specialist aids and equipment which do not fit neatly into the responsibility of one agency, and pool budgets, for example, to cover home alterations such as for wheelchair accessibility or which would facilitate the discharge of people from hospital. Those are all areas where local partners have suggested that they would like to use the new flexibilities.
In the discussion document Partnership in Action, we have consulted on these flexibilities and asked specifically for views as to how they might be used between the NHS and corporate local government beyond social services. Of 171 organisations which responded to that consultation process, not one questioned the need to extend the flexibilities. Indeed, the majority were adamant that wider local government must have the opportunity to be involved. Health action zones, for example, have been keen to use the extended flexibilities and we believe that they will probably act as a test bed for some of the more innovative ideas.
In addition, the Department for Education and Employment conducted its own consultation exercise on the document, seeking views from local education authorities and others in the education field about whether and, if so, how education might be involved. Again, it found no one signalling that the wider use of 857 the flexibilities was undesirable or unnecessary. Overall, the strongest lobbies were to include education and housing. But there were also other suggestions involving areas such as transport, leisure and environmental health.
At this stage, it is not possible to second-guess how the flexibilities might be used in all cases. It is for authorities locally to come up with ideas within the framework that is set. However, we must be sure that we do not deny them the opportunity.
These and other ideas need to be worked out in detail. They would need to comply with the regulations laid down by the Secretary of State. The point of that is that the regulations would enable us to ensure that the necessary consideration has been given to how the flexibilities will operate and to the outcomes that they are intended to achieve.
We recognise that, in the early days, health and social services will lead the way in using the new flexibilities. Clearly, social services is the area where the majority of partnership working with the NHS has been developing and where the pressure for the flexibilities has originated. We want to learn the lessons from this experience. That will be invaluable in generating ideas and building up the wider partnership.
If we were to limit the scope of the provisions that are now before us by accepting the amendment, we should still be able to dismantle the barriers that exist between the NHS and social services, but in a sense it would leave remaining barriers between the other areas of local government. That would be unfortunate.
The noble Earl asked about accountability arrangements. I refer him to the discussion document, Partnership in Action. Paragraph 4.27 of the document makes it clear that the service and financial management accountability in audit—for instance, in the pooled budget—means that ultimate accountability for that budget links back to the existing accountability arrangements for each partner authority. That is extended to the chief executive of the NHS executive, the Secretary of State for Health and Parliament, on the one hand, and, on the other, to the local authority members and ultimately to the local electorate.
Before I sit down, perhaps I may correct a figure that I gave. We had 700 written responses to Partnership in Action; 171 of those responded on that point.
Earl HoweMy Lords, I am grateful to the Minister for that very helpful answer. It was, of course, intended to be a probing amendment; I did not intend to press it in any way. Nevertheless I have the feeling that the more distant NHS money becomes from the NHS, by definition the more distant it becomes from what is normally understood by "healthcare". Having said that, I recognise the need for flexibility and the need to break down artificial barriers. I also appreciate what the noble Lord said about the safeguards that will be built into the system. It has been an extremely helpful short debate and I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
858§ Clause 26 [Powers relating to voluntary schemes]:
§ Baroness Hayman moved Amendment No. 54:
§ Page 20, line 44, after ("section") insert ("and sections 27 and 28").
§ The noble Baroness said: My Lords, we now turn to that part of the Bill, Clauses 26 to 31 and Clause 48, concerned with the purchase of NHS medicines. There are a large number of amendments to deal with and I apologise for the length of what I am about to say. I hope to clarify the government amendments and to speak also to the amendments tabled by noble Lords.
§ The overall purpose of the government amendments is to give greater clarity to our intentions for Pharmaceuticals and the purchase of NHS medicines and to meet the concerns which were expressed in Committee and in the report of the Delegated Powers and Deregulation Committee.
§ Amendments Nos. 54, 55, 56, 58 and 59 make clear on the face of the Bill which of Clauses 26 to 31 apply to which manufacturer and supplier and under what circumstances. There was some debate about this in Committee.
§ Clause 26 gives the Secretary of State powers exercisable only in relation to those companies which are party to the voluntary scheme. These amendments to that clause add to the definition of the conditions to be met by suppliers and manufacturers who choose to be members of the voluntary scheme. They also make explicit the ways in which such membership will be handled in cases where a scheme member appears not to be complying with the scheme. If the Secretary of State decides that a supplier or manufacturer is not abiding by the terms of the voluntary agreement, he will write to that supplier or manufacturer giving reasons for his decision. The supplier or manufacturer will have the opportunity to respond and the Secretary of State will consider the response and reply with his decision. The importance of these changes becomes clearer when we look at the two amendments to Clauses 27 and 28.
§ Clause 27 replaces the power of Section 57 of the 1977 Act to limit the prices of medicines bought by the NHS. This clause is widely drawn because it is difficult, maybe impossible, to envisage all the circumstances when such an action might need to be taken. But, in all cases, the Secretary of State is obliged to consult with the industry body before embarking on any such action. A concern expressed in Committee was that Clause 27 might be applied to suppliers and manufacturers who were members of the voluntary scheme. That was never the intention of the Government. We wish to proceed, as I have said many times before, by co-operation and agreement with the pharmaceutical industry in this and to find a solution which recognises both the interests of the NHS and those of the industry and deals fairly with both. This amendment fulfils our commitment to a voluntary scheme and makes it explicit that those companies who are members of that voluntary scheme shall not be subject to the powers conferred by Clause 27.
§ Clause 28 allows the Secretary of State to make a statutory scheme. The application of a statutory scheme is the alternative to a voluntary scheme. It would apply generally if a voluntary agreement with the industry is not reached or specifically to companies which, for 859 whatever reason, chose not to be members of that voluntary agreement. In Committee it was said that Clause 28 could be read to imply that the Secretary of State could apply a statutory scheme to those companies which were abiding by the terms of the voluntary agreement. This was not our intention and the proposed amendment to Clause 28 underlines that by giving explicit exemption to those companies which are members of the voluntary scheme.
§ The two amendments, Nos. 56A and 67A, tabled by the noble Earl, Lord Howe, have effects which are quite undesirable. The first amendment would add to the circumstances which could give a right of appeal. The appeal provisions recognise the recommendations of the Delegated Powers and Deregulation Committee in connection with the statutory scheme and the statutory provisions connected to the voluntary scheme to make provision for an appeal against a decision by the Secretary of State regarding the control of prices or profits, or the disclosure of information, to an independent tribunal.
§ The decision under appeal would be that the voluntary scheme was not effective in the company's case because of its conduct. But this is a voluntary scheme. It is based on co-operation and agreement between the Secretary of State and a supplier or manufacturer. Whether there is agreement between those two parties is surely a matter easily determined by the actions of the involved parties. If they cannot agree that they are in agreement, then I suggest that the agreement has failed and both parties have an equal right to leave it. This is not a matter for appeal on one side and not the other. We have made provision which provides for the position where a company is seen not to be complying with the voluntary scheme. The Secretary of State must inform the company formally of that view and take into account the company's response. Further, in his final response the Secretary of State must give his reasons; and, as always, he must act reasonably. I would expect—and I say this in no way to prejudge the outcome of the current negotiations with the Association of British Pharmaceutical Industry—that the voluntary arrangements will contain an agreed mechanism to allow for the resolution of dispute between companies and the Secretary of State. All this adds up, I would say, to more than sufficient protection. Perhaps noble Lords might consider the position were the Secretary of State to be given a parallel right of appeal against a company's decision that it was no longer a member of the voluntary scheme. Were he successful on appeal, the company would be forced to comply with a voluntary agreement. I suggest that that is a nonsense and that we should not go down that route as far as the companies are concerned.
§ The second amendment would place the Secretary of State in a potentially very interesting position. Under the proposal, the Secretary of State is only entitled to decide that the voluntary scheme ceases to apply to a company if that company increases the prices of health service medicines without approval or fails to record, keep and supply information needed for the voluntary scheme. I remind noble Lords that the voluntary scheme is 860 intended to deliver medicines to the NHS at reasonable prices by having regard to the profits made from their sale by a supplier or manufacturer. This amendment would allow a company to make excessive profits, refuse to make an appropriate payment to the Secretary of State and still remain a member of the voluntary scheme. That cannot be right.
§ The cumulative effect of these five government amendments is to bring some extra clarity to the Bill. They confirm our commitment to a voluntary scheme and protect the position of those companies which are members of that scheme: they will not be subject to any of the powers conferred by Clauses 27 and 28. In Committee, the noble Earl, Lord Howe, said that the enactment of new compulsory powers of price and profit control which could operate indiscriminately against saints and rogues alike was inappropriate. I believe that we have divided the saints from the sinners by these amendments and I hope that the noble Lord will accept that.
§ As I have just said, in dealing with the industry it is our hope that we may continue through co-operation and voluntary agreement. To this end negotiations are currently taking place with the Association of British Pharmaceutical Industry. But the Bill allows for two further eventualities: first, where a voluntary agreement is not reached—although I think that unlikely—and, secondly, where a voluntary agreement is reached but one or more companies do not abide by its terms. Amendments Nos. 63 and 64 deal with this area.
§ Clauses 27 to 31 enable the Secretary of State to deal with these two cases in a way which is equitable, both to the industry and to the NHS. Our intention that companies who abide by the terms of the voluntary scheme will be unaffected either by the alternative statutory scheme or by price controls has also been made explicit on the face of the Bill through earlier amendments. Clause 27 allows the Secretary of State to limit any price which may be charged by any manufacturer or supplier for the supply of any health service medicine after consultation with the industry body. That power would apply only in the absence of a voluntary scheme or in the case of suppliers and manufacturers not complying with a voluntary scheme. Amendments Nos. 63 and 64 to Clause 29 mean that the Secretary of State must consult the industry body before making any provision to enable and facilitate the introduction of such a price limitation. This requirement to consult also applies to the amended Clause 29(2) which extends the requirement to record, keep and provide information to the Secretary of State. I hope that these amendments will be welcomed by the House.
§
The extensive Amendment No. 67 deals with several concerns expressed so far throughout the passage of the Bill and by the Delegated Powers and Deregulation Committee. In its consideration of Clauses 26 to 29 the committee concluded,
that, as presently drafted, the power of the Minister to give directions is not circumscribed by sufficient safeguards that this power will only be used in an appropriate manner. In taking powers to ensure that prices are fair and reasonable to the NHS and to companies, the Government has an obligation to ensure that those powers are of themselves fair and reasonable. We invite the House to consider amending the Bill to make provision for an appeal
861
against a decision by the Secretary of State regarding the control of prices or profits, or the disclosure of information, to an independent tribunal (either on the face of the Bill or by way of a requirement to provide an appeal in the regulations), in a process which is speedy and as open as commercial confidentiality allows".
In our debate at Committee stage the noble Earl, Lord Howe, pointed to the extra advantage of providing a mechanism for the swift resolution of disputes between companies and the Department of Health which an appeal system would afford. That point is well taken. The existing PPRS lacks such a mechanism and that has been one of its weaknesses.
§ The noble Earl also spoke of his concerns in connection with the Secretary of State's power to require companies to provide any information which the Secretary of State required for the purpose of enabling the scheme to operate. The problem was that on the face of the Bill the Secretary of State seemingly had the power to require any information. I offered my assurances to the noble Earl that the voluntary scheme itself would determine what was required for its effective operation and we intended that the information required would be in the voluntary agreement that we sought to reach with the industry. I recognised that Clause 26(3) was wide in terms of the information that could be sought and, with the permission of the Committee, took the matter away for further consideration. Amendment No. 67 has been drawn to meet the recommendations of the Select Committee and the concerns expressed at Committee stage. It will enable the Secretary of State to provide for a right of appeal by an affected supplier or manufacturer against decisions of the Secretary of State specific to a particular supplier or manufacturer to require information, to limit any price or profit, to refuse his consent to a price increase, or to pay any amount by way of excess profits, prices or penalties. An appeal will represent a very considerable additional safeguard to members of the pharmaceutical industry covered either by the voluntary arrangements or the statutory scheme.
§
The addition of subsection (4D) in this amendment requires some explanation. It provides:
A requirement or prohibition, or a limit, under Sections 26 to 29 may only be enforced under this section and may not be relied on in any proceedings other than proceedings under this section".
A concern of the pharmaceutical industry has been that the effects of either a voluntary agreement or a statutory scheme may inadvertently go wider than intended and enable third parties to seek recovery of excess prices. This matter was aired at Committee stage by the noble Earl, Lord Howe, and the noble Lord, Lord Clement-Jones. It is agreed that the intention of either a voluntary agreement or a statutory scheme is clear: to ensure that the prices paid by the NHS for its medicines are fair and reasonable. There is no reason to extend this requirement beyond the proper business of the NHS. It is certainly not the business of the NHS to influence the prices paid by third parties for their medicines, although in view of earlier debates perhaps the noble Earl believes that we should also meddle in that. An amendment refining the definition of a health service medicine was suggested and I said then that I was unsure whether it was appropriate or that it should be on the face of the Bill. We have now decided that an
862
explicit statement to the effect that the operation of Clauses 26 to 29 shall have no effect beyond the operation of Clause 30 is the best way to proceed. I am confident that this will remove the problem to which I referred.
§ Amendment No. 100 to Clause 48 takes account of another recommendation of the Delegated Powers and Deregulation Committee. Clause 30(6) provides for an increase in financial penalties arising from contraventions under Clauses 26 to 29. At Committee stage the noble Earl thought it wholly wrong for Parliament to give a blanket power to the Secretary of State to enable him to set any amount as a penalty. That sentiment was strongly endorsed by the noble Lord, Lord Clement-Jones. I agree. Therefore, this amendment ensures that the Secretary of State cannot proceed in these matters other than with the approval of Parliament. We hope that these measures will be used infrequently over the lifetime of the Bill. Nevertheless, it remains sensible to circumscribe the use of Clause 30(6) in this explicit way.
§ At Committee stage the noble Earl also suggested an amendment so that there should be consultation with the industry body about the regulations to impose penalties payable because of non-compliance by a company. I said at the time that it was entirely proper that the industry body should be consulted over matters of detail relating to the sales of medicines to the NHS but that the amendment as proposed might not be the best way of extending the consultation process. Amendment No. 68 accommodates the purpose of the noble Earl's amendment and makes the matter explicitly clear: the Secretary of State must consult the industry body before making regulations under Clause 30.
§ Clause 31 deals with the way in which the Secretary of State is to exercise the powers conferred in earlier clauses. Subsection (1) allows the Secretary of State to make regulations and issue directions. Amendments Nos. 69, 70 and 71 by introducing and defining "specific" make it clearer that directions are specific to an individual supplier or manufacturer in contrast to regulations which are general. Amendments Nos. 75 and 76 separate the existing composite definition of what is meant by the term "health service medicine". The definition incorporates the words "medicinal product" with the meaning of those words by reference to Section 130 of the Medicines Act 1968 being given in brackets. Instead, they would be defined in a free-standing definition. The amendments incorporate no change of meaning.
§ I turn next to Amendments Nos. 72 and 73. At Committee stage the noble Baroness, Lady Sharp of Guildford, moved an amendment to ensure that any statutory scheme of price regulation that was introduced took account of the importance of research and development in that industry. The importance of the pharmaceutical industry and nurturing its research and development capacity was a recurring theme of our debates. Certainly, it is not an area in which I wish to disagree with the central importance of that point. Amendments Nos. 72 and 73 are tabled to make clear on the face of the Bill that the costs of research and development are an important component of reaching a 863 decision on the reasonableness of prices. I believe that the amendments as worded meet what was asked in the noble Baroness's amendment and reassure both this House and the pharmaceutical industry that the Government understand and value the importance to the NHS as a whole of research and development.
§
I turn to Amendment No. 73A. I understand what the noble Earl has in mind with his amendment: to make clear that the Secretary of State in exercising powers under Clauses 27(a), 28(1) and 28(6)(a) must have regard to the right of suppliers and manufacturers to make a reasonable profit from business with the NHS. But I suggest that Clause 31(4) shows that the Secretary of State must already act by
reference to the prices or profits which would be reasonable in all the circumstances".
I hope that the noble Earl agrees that the point is therefore covered and that it is unwise to add words to legislation that do not bring to it any new meaning or add to clarity. With my apologies for the length of my remarks, I commend these government amendments to the House.
Earl HoweMy Lords, we warmly welcome the amendments. I thank the Minister for having responded so constructively to the concerns that I and other noble Lords voiced in Committee on these clauses. The noble Baroness has gone to great trouble which I am sure the whole House will appreciate.
The Minister has fulfilled in almost all respects—I should like to have said in all respects—the undertaking given in Committee to meet those concerns. It will probably seem ungracious and churlish of me to have tabled Amendments Nos. 56A, 67A and 73A which seek to add to the wording of the adjacent government amendments. I make clear that these additions are intended to do no more than make the government amendments work in the way that I thought was intended. It is no part of my purpose to be confrontational.
I am grateful to the noble Baroness for her comments on the amendments. It may assist the House if I introduce them briefly. Amendment No. 56A is designed to make clear that the ability of the Secretary of State to take companies out of the voluntary scheme is limited to circumstances where they have breached the terms of the scheme. At present subsection (2B) of the amendment seems to give the Secretary of State virtual carte blanche to take a subjective view of the matter on which he may then base a decision. That does not seem right. Nevertheless, I am grateful for the noble Baroness's comments, upon which I shall reflect.
Amendment No. 67A concerns the right of appeal. I believe that the right of appeal should include an appeal against a decision of the Secretary of State to remove a company from the scope of the voluntary scheme. At present if one looks at the amendment together with one of my previous amendments, one sees that the Secretary of State has complete discretion to remove companies from the voluntary scheme without apparently having to determine that they had breached the scheme and without a right of appeal for the 864 companies concerned. That is why I believe that my proposed addition to the government amendment is important. Again, I shall read carefully what the noble Baroness said on the matter.
Amendment No. 73A attempts to make clear that the statutory objectives set out for Clauses 26 to 31 should strike a fair balance between the requirement of the Secretary of State to secure safe and effective medicines on reasonable terms and the rights of manufacturers and suppliers to receive reasonable profits on the supply of medicines to the NHS, and their research and development costs. I did not think that the Government's new text did quite enough to recognise the interests of companies to make a fair return. One reason was that other statutes—for example, Section 3 of the Electricity Act—include language which recognises explicitly the objective of enabling companies to obtain a reasonable rate of return. I need to emphasise to the Minister that the wording of her amendment is extremely helpful. However, perhaps I may suggest that she considers the point again. I take note of what she said in relation to Clause 31(4).
Finally, I revert to the right of appeal. Will the Minister confirm that it is the Government's intention to introduce regulations at an early date after the enactment of the Bill? In other words, can she confirm that the permissive format of her amendment is no more than an adherence to the conventions of drafting?
§ Baroness HaymanMy Lords, before the noble Earl sits down, I can confirm that it is permissive, but we have every intention of setting up such an appeal scheme.
§ Baroness Sharp of GuildfordMy Lords, I thank the Minister for her full explanation of the amendments. On these Benches, we are pleased at the degree to which she has recognised the importance of research and development to the industry. Nevertheless, at present the amendments reflect substantially the amendments tabled at Committee stage by the noble Earl, Lord Howe. We understand why the amendments were tabled. In many respects they reflect the wishes of the pharmaceutical industry. Incorporating the amendments into their own, the Government have in many senses gone along with the wishes of the pharmaceutical industry about the regulation scheme. We agree that they provide greater clarity and meet many of the criticisms of the Delegated Powers and Deregulation Committee, for example about appeal mechanisms.
Nevertheless, from these Benches we maintain the view we expressed at Committee stage. We believe that a voluntary agreement should be what it states: a voluntary agreement. It should not be propped up by the Government. The industry should not have to look to the Government to enforce its own voluntary agreement when firms do not obey it. That the Government are now getting into bed with the industry to enforce its own agreement smacks too much of a cosy relationship—"I"ll scratch your back if you'll scratch mine".
865 On these Benches, we would prefer to see a more distant relationship—a voluntary scheme run by the industry, not having to be enforced by the Government. Alternatively, if the voluntary scheme does not work, we are prepared to condone a statutory scheme which is incorporated in Clauses 27 and 28. As it is, the statutory scheme will remain a fallback provision which is unlikely to be used provided that the voluntary scheme, with government backing, is effective. In effect, we are now being offered this voluntary scheme—a voluntary provision that provides for the Government to help enforce it.
Given that we have that cosy relationship, it becomes more vital that the Bill incorporates the transparency provisions of the new clause proposed by the noble Lord, Lord Desai, which we shall debate shortly. We recognise the benefits that the PPRS has brought to the British pharmaceutical industry over the past 30 years. We are sorry that it does not remain what it has been: a voluntary agreement voluntarily enforced; and that the Government have succumbed to being a partner in enforcing it. We remain unhappy at the degree to which it muddies the water between state and industry and encourages a degree of corporatism which we on these Benches cannot condone. I therefore register our unhappiness with some of the amendments as they stand but accept that the Government have made a considerable number of moves in the direction that we ask. I thank them.
§ Lord LyellMy Lords, I hope that I shall not tread on the toes of the noble Lord, Lord Clement-Jones. I declare an interest in that I had a delicious free dinner last night from one pharmaceutical company. It is the only financial, tangible interest that I have received from the pharmaceutical industry over 22 years. Noble Lords will be aware of perorations from me in praise of the good work that can be done by the industry.
Concerns were expressed to me at Second Reading and an earlier stage of the Bill. The noble Baroness seems to have covered virtually every point. However, perhaps today or later she can clarify this point. The Minister referred to prices and profits, although in separate compartments. Am I right to think that those are part of a weird amalgam, a formula that has developed over the years? I believe that it used to be called the voluntary price scheme. It then became the pharmaceutical price scheme. It is an arcane formula that evolved on an industry-wide basis and from time to time on individual large companies with a specific product that is greatly in demand. Will the factors of both price and profit be part of the discussion between the Government and the industry? I hope that the Minister's amendments will not muddy the waters, be more prescriptive, or add something unforeseen.
The noble Baroness pointed out that reasonableness is behind the amendments. That is a factor which has appeared in all the discussions between the industry as a whole, individual companies and the department. The amendments appear to meet all the issues which were brought to my attention by various sections of the 866 industry. After the large dinner last night, I would not wish to appear greedy, glutinous or curmudgeonly towards the scheme.
I am grateful for what the Minister has done and I hope that the amendments will enable the scheme to continue beyond its 30 years. It should be discussed beyond your Lordships' House, and I say that advisedly, because we are not experts in the complicated formula. Discussions should take place in a discreet and reasonable way and I and the industry are grateful for what the noble Baroness has done.
§ Lord Walton of DetchantMy Lords, I, too, welcome the amendments which have been tabled by the noble Baroness. When the Bill was first published, the ABPI, and even pharmaceutical companies which were not members, expressed several important concerns. The first was that the voluntary scheme which had served the country and the NHS well should continue and should be on a voluntary basis and that those companies adhering fully to that voluntary scheme would not be subject to statutory control. That point has been properly met.
The second concern was that companies outside the voluntary scheme, for whatever reason, some of which had without any consultation increased the prices of medicines being supplied to the NHS which were, in the view of the Government and others, and to some extent in the view of the ABPI, beyond a reasonable amount, should be subject to a statutory scheme. That intention was clearly accepted by the ABPI.
The third and most important point, bearing in mind the enormous contribution made by the pharmaceutical industry to our balance of payments and recognising the fact that some of the most effective medicines available in the NHS have resulted from research and development carried out in the UK, was that research and development costs should be taken into account in relation to agreements under the voluntary scheme.
Those were the three principal concerns of the industry. In my view, the noble Baroness's amendments have met virtually all those anxieties and I congratulate her upon them.
§ Baroness HaymanMy Lords, I am most grateful to the noble Lord, Lord Walton, and others who have welcomed what I intended to be helpful amendments in striking the right balance. I reassure the noble Lord, Lord Lyell, that what we are doing will enable a new voluntary arrangement to be created. The current arrangement is coming to an end and we are in negotiations to create a new one which will allow for flexibility between profits and prices and will enable us to strike a balance between fairness to the NHS and to the companies in terms of profit. The advantages of such flexibility to a voluntary scheme are great and we shall try to safeguard them. I have always made it clear that the Government's intention is to do their best to negotiate a successful voluntary scheme and to abide by it.
Perhaps I may reply briefly to the points made by the noble Earl, Lord Howe. I hope that he is reassured that we have put on the face of the Bill the responsibility to 867 take into account reasonable profits in respect of schemes. I hope that he will reflect on whether it is sensible to set up an appeals mechanism against a conclusion reached through a proper process, which I described, and that a voluntary agreement which needs "two to tango" has not come to an end.
I fundamentally disagree with the noble Baroness, Lady Sharp, in her analysis of what we are doing by the statutory provisions which could be called into effect with the voluntary agreement. I understood her desire that we should not have a hybrid scheme, which she expressed in Committee. The amendments we have brought forward more clearly separate out the voluntary agreement from the statutory agreement, but I cannot believe that she would not share my concern that the voluntary agreement, as it existed, was not as effective in delivering as any of us would have wished. I believe that companies which were party to it—and I refer to the minority—could choose not to supply the information and could increase prices without notifying the department. There is no mechanism whatever to fall back on. I do not believe that that was a satisfactory arrangement. The industry has understood it to be unsatisfactory, which is why it has accepted the need for some statutory back up. We are not therefore diluting the voluntary nature; we are making it stronger so that those who complied with it because they believed that it was the right thing to do would not see other people getting away scot-free with non-compliance. I disagree with the noble Baroness's analysis, but the House has been most generous in its response to our proposals and I am grateful.
§ On Question, amendment agreed to.
§ Baroness Hayman moved Amendment No. 55:
§ Page 21, leave out lines 9 to 12 and insert ("and sections 27 and 28, a voluntary scheme is to be treated as applying to a manufacturer or supplier to whom it relates if—
- (a) he has consented to the scheme being so treated (and has not withdrawn that consent), and
- (b) no notice is in force in his case under subsection (2C).
(2A) For the purposes of this section").
§ On Question, amendment agreed to.
§ [Amendment No. 56A not moved.]
§ Baroness Hayman moved Amendment No. 56:
§
Page 21, line 15, at end insert—
("(2B) If, in the opinion of the Secretary of State, any acts or omissions of any manufacturer or supplier to whom a voluntary scheme applies (a "scheme member") have shown that, in the scheme member's case, the scheme is ineffective for either of the purposes mentioned in subsection (1), the Secretary of State may give written notice of that fact to the scheme member stating his reasons.
(2C) If, after the Secretary of State has given the scheme member an opportunity to make representations about the acts or omissions in question, he continues to be of that opinion, he may by a further written notice given to the scheme member (and stating his reasons) determine that the scheme should cease to apply in the scheme member's case.
868
(2D) Consent under subsection (2)(a) must be given, or withdrawn, in the manner required by the Secretary of State. ").
§ On Question, amendment agreed to.
§ Earl Howe moved Amendment No. 57:
§ Page 21, line 23, at end insert (", for the purpose of giving effect to a voluntary scheme").
§ The noble Earl said: My Lords, the point at issue is that Clause 26(4) does not, as currently drafted, make it clear that the powers it contains are to be exercised within the parameters of the voluntary scheme. That may well be implied from the structure of the clause taken as a whole, but the point is an important one on which there should be no ambiguity. When companies sign up to the voluntary scheme, the control powers in Clause 26(4) should be related to the provisions of the voluntary scheme itself. I beg to move.
§ Baroness HaymanMy Lords, I hope that I can reassure the noble Earl. All the powers conferred by Clause 26 are exercisable only where there is a voluntary scheme in existence between the Secretary of State and the industry body. The voluntary scheme is described in Clause 26 as having the purpose of limiting the prices charged for medicines supplied to the NHS or of limiting the profits made from such sales.
Subsection (4) allows the Secretary of State to prohibit any increase in prices without his approval and also to recover any sums charged in contravention of that prohibition. But the prohibition can only relate to medicines covered by the scheme. It is clearly not the case that the prohibition would operate outside the scope of the provisions of the voluntary scheme. It is Clause 27 which deals with the control of prices in the absence of the voluntary scheme, or in the case of suppliers and manufacturers not abiding by the terms of the voluntary scheme.
While I accept that this amendment is intended to add clarity to the purpose of Clause 26, I hope that the noble Earl will feel that it is already clear as to what Clause 26 provides and the way in which it will operate.
§ 6 p. m.
§ Amendment, by leave, withdrawn.
§ Clause 27 [Power to control prices]:
§ Baroness Hayman moved Amendment No. 58:
§
Page 21, line 40, at end insert—
("( ) The powers conferred by this section are not exercisable at any time in relation to a manufacturer or supplier to whom at that time a voluntary scheme applies. ").
§ On Question, amendment agreed to.
§ Clause 28 [Statutory schemes]:
§ Baroness Hayman moved Amendment No. 59:
§
Page 22, line 31, at end insert—
("( ) A statutory scheme may not apply to a manufacturer or supplier to whom a voluntary scheme applies. ").
§ On Question, amendment agreed to.
869§ Earl Howe moved Amendment No. 60:
§ Leave out Clause 28.
§ The noble Earl said: My Lords, notwithstanding the very helpful amendments being moved by the Government today which place the Bill's provisions onto a much sounder footing, I hope that the House will allow me to make one or two observations on the reserve powers contained in Clause 28.
§ What we still have in the Bill, admittedly as a reserve power but nevertheless available for use by the Secretary of State with little further formality, is a power to create an entirely new operating climate for the pharmaceutical industry in the UK. The considerable worry shared by those of us on these Benches is that to interfere with the voluntary arrangements of the PPRS, which have, by and large, worked supremely well for over 40 years to the shared benefit of government, industry and the NHS, is a course upon which we should embark at our peril.
§ The introduction of a statutory scheme, were that to occur, with all the cards stacked in the Secretary of State's favour, would represent a huge risk to the continued stability of the pharmaceutical industry. The ethos which has underpinned the PPRS from its inception has been that, by mutual agreement, there really can be a fair deal for the NHS and patients combined with a flourishing R&D base in the UK. The clear message here would be that that ethos has been consigned to history. For a statutory scheme allowing prices to be controlled by Whitehall would, at a stroke, skew the present delicate balance of advantages away from the industry.
§ But who then would be the beneficiaries? I suggest that it would not be the NHS. Compulsory price fixing would act as an instant disincentive to pharmaceutical companies to continue operating in the UK. Why should they invest in research if they cannot earn a fair return on capital here? If the research base migrates overseas, it will no longer be the British patient who first sees the benefits of new treatments emerging onto the market.
§ I fully acknowledge that the government amendments have gone a long way to allay the fears of the industry. The Minister will say that there is no present intention to create a statutory scheme. All right, but I maintain that even the existence of a reserve power such as we find in Clause 28 will create sufficient uncertainty among pharmaceutical companies, particularly foreign-owned pharmaceutical companies, to undermine long-term business confidence. The threat of a compulsory scheme, however veiled, combined with that other hurdle created by NICE of the requirement on a manufacturer to demonstrate the cost-effectiveness of a drug, will create the perception of an unfriendly business environment in this country. One does not need much more than that perception to cause businesses to start packing up their tents and looking elsewhere.
§ The pharmaceutical industry is global. The UK industry represents 3 per cent. of the world market. The competitiveness of the UK as a home for pharmaceutical activity is already declining. The only things which make the UK attractive to foreign investors are the 870 strength of our science base and the ability to operate in a more benign and stable business environment than some others overseas.
§ Peter Mandelson, in an evocative phrase, spoke of wanting to create a knowledge-driven economy. The pharmaceutical industry is surely the largest knowledge-driven sector that we have. It is the second largest earner of foreign currency after the oil industry and yet here suddenly we seem to have a Government acting schizophrenically: they sing the praises of the knowledge-driven economy and simultaneously take powers to clamp down on it.
§ The Minister will have gathered that I am uneasy about those provisions remaining in the Bill. I await her reply with interest. In the meantime, I beg to move.
§ Baroness Sharp of GuildfordMy Lords, from these Benches, we cannot support the noble Earl, Lord Howe. We accept the response which the Minister gave us in relation to our reservations about the amendments that she tabled earlier. We recognise that if the voluntary scheme is to work satisfactorily, it needs the back-up of the statutory scheme which is incorporated in Clause 28. Therefore, on these Benches we support the Government in maintaining Clause 28.
§ Baroness HaymanMy Lords, I am grateful to the noble Earl for giving me the opportunity to say once again that we value one of Britain's most successful industries—the pharmaceutical industry—and wish to create a climate in which it flourishes. We recognise in particular the research and development strength and what we can offer the industry and what the industry can offer this country.
I believe that the industry itself recognises that having a sophisticated and discriminating home market is an advantage and not a disadvantage. I can underline too, as I said earlier this evening, that we have every intention of wholeheartedly renegotiating a voluntary price regulation scheme with the industry.
The noble Earl accused us of being schizophrenic in our attitude by having reserve statutory powers. I suggest to him that it is not schizophrenia but responsibility which is underlying our attitude here. We believe that it would be unwise totally to rely on a voluntary scheme.
Some pharmaceutical industries may not be willing to sign up to it or to comply fully with another voluntary agreement that is reached between the Government and the pharmaceutical industry. I am afraid that experience under the present scheme, as I mentioned earlier, provides evidence of that. I told your Lordships in Committee that one significant company has not submitted information required under the present scheme since 1990. In 1998 alone 24 companies increased prices without the agreement of the Secretary of State, outside the terms of the PPRS and at an annual cost to the NHS of £30 million.
Although the Government wish and believe that they will conclude another agreement with the industry, it is prudent for us to provide for a situation in which it is not possible, after the best endeavours of both sides, to 871 reach an outcome which the Government and the industry are prepared to accept. The provisions in this clause are the minimum necessary to enable the Secretary of State to establish a statutory scheme.
There are a number of important safeguards written in if it proves necessary for the Secretary of State to use those powers. The noble Earl seemed to suggest that a statutory scheme would somehow undermine the industry and there would be no ability to make any form of profit whatever. We have made it clear that there will be the same considerations of reasonable profit and fairness to the NHS in a statutory scheme as we shall be aiming for in a voluntary scheme.
However, branded medicines are specialised products, the development of which incur considerable research and development expenditure. Those products have limited interchangeability in many circumstances and new medicines are subject to patent protection. That gives companies a period of market exclusivity. For that reason, the Government have concluded that it is necessary to continue to take steps in that area to ensure that prices are fair and reasonable, both to companies and to the NHS. We want to reach another agreement with the industry but, as I said earlier, it would be unfair on those companies which agree to abide by that new agreement while other companies are able to opt out of the scheme and be subject to no scheme at all.
As a last resort the Government must protect the interests of the NHS by having available reserved powers to implement a statutory scheme if it proved impossible to reach agreement with some or all of the pharmaceutical industry. For those reasons I urge the noble Earl to withdraw his amendment.
Earl HoweMy Lords, the Minister has made some reassuring comments. As I said earlier, the Government have done a lot to allay the initial fears expressed by the industry. For that we are extremely grateful.
My main point was that often markets and investment decisions turn on perceptions, sometimes quite irrational perceptions, but nevertheless that happens. If, in the future, a multi-national pharmaceutical company considers whether or not to invest in the UK, credibility is not stretched too much to imagine such a company looking at the reserved powers for a statutory scheme and asking whether the UK represented the most favourable place for that investment.
I hope that the Government are right in their judgment. If they are not right, the consequences will be very serious for us all. I still have nagging doubts about the criticisms that the Minister has voiced against the existing PPRS. If, as she maintains, the present PPRS is not working properly and we have an unacceptable minority of companies which are the cause of that, why not simply introduce a system of arbitration, combined with penalties for infringement? Why is it necessary to have reserved powers for a fully-fledged statutory scheme? I am still not convinced, but this is not a matter that I shall press. I believe that it is right to have voiced these concerns, but I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
872§ Lord Desai moved Amendment No. 61:
§ After Clause 28, insert the following new clause—
§
PUBLICATION OF DETAILS OF VOLUNTARY OR STATUTORY SCHEME
(". The Secretary of State shall publish a statement of any voluntary or statutory scheme he has agreed with the industry, which statement shall include—
§ The noble Lord said: My Lords, perhaps I should begin by declaring a non-pecuniary interest. Unlike the noble Lord, Lord Lyell, I am not in the habit of getting dinner, but I have spoken to the National Consumer Council, which has expressed reservations about the scheme. Noble Lords will remember that I pursued this point in Committee. It was well past midnight on that halcyon evening and we marched into the lobbies at 1.30 a. m. in the morning. I was brief at that time and thought that I would not try the patience of noble Lords too much.
§ However, I have returned to this issue because it is an important one. There are questions about the voluntary arrangement for PPRS or even the statutory ones. There is a missing actor and that is the consumer. I am grateful to the noble Baroness, Lady Sharp, for having welcomed my amendment before I had moved it; I hope that I shall have her support.
§ The first problem is that the Secretary of State is obliged not only to secure reasonable prices for the medicine board of the National Health Service but to promote the pharmaceutical industry. In Committee I argued that that is schizophrenic. If there is schizophrenia, that is it. I do not understand why the DTI does not undertake the task of promoting the pharmaceutical industry. What does it have to do with the Secretary of State?
§ The scheme that we have is a kind of bilateral monopoly. It is a very cosy arrangement. One large buyer can influence a few large sellers. The fact that there is a large stable buyer no doubt has immensely benefited the pharmaceutical industry. That fact is seldom mentioned when people talk about how efficient the pharmaceutical industry is. I do not deny that it is efficient. The advantage that a large stable demand from the National Health Service has on the pharmaceutical industry is not to be underestimated.
§ My amendment asks for a certain amount of transparency in these arrangements. First, if the Secretary of State is to determine prices or profits, paragraph (a) of Amendment No. 61 says that the criteria he will use for these purposes ought to be made explicit.
873§ Secondly, given the schizophrenic role of the Secretary of State, we must be quite clear what information will be suppressed because it is commercially confidential and the justifications for that. Whose interests are we protecting?
§ Thirdly, it is a matter of concern that in all the consultations industry bodies are mentioned but consumers are seldom mentioned. Basically, consumer bodies and public interest bodies ought to be consulted on this matter. While I entirely trust the Minister and my right honourable friend the Secretary of State for Health to look after national interests, it will still be good to have consumer interests specifically represented when the scheme is discussed.
§ Lastly, it mentions an independent audit of the way in which the scheme is set up. It is a fairly modest amendment, but it proposes to introduce a culture of transparency and accountability in the voluntary or statutory scheme and it introduces, in a major way, the interests of consumers. I beg to move.
§ 6.15 p. m.
Lord LucasMy Lords, perhaps I may speak to Amendment No. 74 which is grouped with Amendment No. 61. I am delighted to see the noble Lord, Lord Desai, and myself as Back-Benchers grouped together, producing a cross-party Back-Bench amendment. I hope the Minister will be suitably impressed. After our discussion in Committee, she was kind enough to write to me a long and helpful letter on the amendments that I tabled at that stage, avowing a commitment to freedom of information. I am delighted to note that the noble Baroness shares that commitment, striking again, as we did in Committee, the rock of commercial incompetence.
My reply to that is Amendment No. 74, which says that details should be published, except that which is "commercially in confidence". I hope the noble Baroness will think that that provides a reasonable answer to all the problems that she has raised. In case she does not, it would be helpful if the Minister or her officials in a letter could give examples of what sort of confidential information would generally come to light in such cases. If a company is fined or given directions as to price or market behaviour, I do not believe the fact that directions have been given to that company would be considered as "commercially in confidence". How can the fact that the Government have given directions to a company be "commercially in confidence"? Perhaps one can go beyond that and say that it could be in respect of a particular preparation. Again, how can that fact be commercially in confidence? One can work a long way down the circumstances that we have envisaged being covered by this scheme, before discovering anything that is "commercially in confidence" of which a competitor could take advantage.
It is commonplace for those who have sinned and have been found out and punished to have their names published, unless they are minors or people who should be protected. I do not believe that pharmaceutical companies come into that category. In the interests of 874 freedom of information, in the interests of openness and good government, I believe that the Government should publish as much information as they can. I hope that the noble Baroness will agree that my amendment will give them that option.
§ Baroness Sharp of GuildfordMy Lords, I rise to support both amendments. As the noble Lord, Lord Desai, said, the pharmaceutical industry has done, does and will continue to do, extremely well out of the pharmaceutical price regulation scheme. The benefit has been a research-based industry which is the UK's most successful industry. We recognise that. It is nice to have a few very successful industries.
However, that industry's profits are extremely large. Like the noble Lord, Lord Desai, we argued in Committee that the scheme was a piece of industrial policy and that, as such, it should be within the orbit of the Department of Trade and Industry rather than of the Department of Health. As I said, it is a cosy arrangement, settled behind closed doors. Perhaps I may advise the noble Lord, Lord Lucas, that individual negotiations take place with individual companies behind closed doors when they reveal much about their costs which they regard as being very commercially confidential. They do not want that to be revealed to their competitors—and one recognises why. Nevertheless, that deal is done in the interests of consumers and it is important that consumers should know as much as they can about such deals. Transparency is an important issue. We on these Benches entirely endorse the two amendments.
§ Baroness Carnegy of LourMy Lords, I may have misunderstood the discussion, but I am amazed at what the noble Baroness just said. If a big manufacturer is negotiating this deal with the NHS—because the Government are prepared to accept the "schizophrenia" which the noble Lord, Lord Desai, mentioned in order to achieve the best possible prices for the NHS—presumably the facts discussed when making the deal include the manufacturing costs of producing a particular product; and the world will know the selling price and "confidential information" passes to the world of commerce. The noble Lord knows that very well.
The schizophrenia point is valid. It is strange that we have to do this, but it is accepted as necessary. Some products will be sold across the counter for their real price. However, I do not think that one can possibly say that just because pharmaceutical companies make a lot of money they should have to reveal everything in such discussions. Of course, because they make a lot of money it is possible to contemplate such an arrangement. I see that, but perhaps I am misunderstanding the point. I simply do not think that you can say that because people make a lot of money they must give away their entire trade. We very much value those industries.
§ Lord HaskelMy Lords, perhaps I may remind my noble friend the Minister that this matter of commercial information involves a two-way road and that under corporate governance regulations, limited liability 875 regulations and the Companies Acts, companies have to give out a certain amount of information. It is not only a matter of the Government giving out such information; it is also up to the companies to do so. The Minister should bear that point in mind when responding to the amendment.
Regarding the point made by my noble friend Lord Desai about Financial assistance to the pharmaceutical industry, perhaps I may remind him that in the Budget the Chancellor announced £1.3 billion of assistance to technology-based companies, many of which are in the pharmaceutical industry, and that seven centres of excellence are to be established. That will be very much in the interests of the pharmaceutical companies. The Government are doing quite a lot to encourage this.
§ Baroness Sharp of GuildfordMy Lords, perhaps I may—
§ Lord Clement-JonesMy Lords, in that case, perhaps I may give some clarification on behalf of my noble friend Lady Sharp. We on these Benches fully support the amendment. Indeed, the noble Lord, Lord Haskel, has just given even further reasons for doing so.
Of course, one is not asking for the ultimate in terms of commercial information, such as the cost base, but City analysts have a fair idea of gross and net margins. Such information is not absolutely secret from competitors. I do not believe that the amendment suggests that a company should reveal anything unreasonably. The provisions seem eminently reasonable. It was no part of my noble friend's case to say that because companies make profits they should therefore have to reveal everything. That was certainly not her case.
§ Baroness HaymanMy Lords, we have had a useful short debate on this issue. I share the concerns expressed by the "unholy alliance" of the two Back Benches, if I can put it that way, that we should do all that we can to ensure that information is available, that there is transparency in the terms of the agreements between government and the industry, and that there should be adequate consultation on matters of public interest.
My noble friend set out the reasons for his amendment very clearly. I hope that I can reassure him that I believe that what he is seeking to achieve will, indeed, be achieved.
The details of the new voluntary scheme itself will be written into the document agreed by the Secretary of State and the industry body. Given the key need for greater transparency, the new agreement will have to be very much more specific than previous ones. It must be clear from its face how it is going to operate in a fair and transparent manner and apply equitably to the suppliers and manufacturers. We will continue the practice adopted with previous voluntary arrangements and publish the agreement. We intend to report regularly on the working of the agreement and to include in those 876 reports the level of detail required. I shall come to any caveats about the level of detail that it might be appropriate not to share.
The idea is to publish as much information as we can, rather than as little as we are forced to. The statutory scheme, if it is needed, will be set out in regulations and those regulations—again, public documents—will have to be very detailed and formulaic and contain the criteria to which my noble friend's amendment points.
Perhaps I may turn to the vexed question of what is commercially confidential. There is obviously tension between information that should freely be available and any legitimate right to privacy. The noble Lord, Lord Clement-Jones, and my noble friend Lord Haskel rightly said that companies already have to publish much information in terms of their corporate governance responsibilities. That is not the level of information with which we are dealing. However, the effective operation of the scheme depends on companies providing information to a level of detail that is not in their published accounts and where such publication could harm their commercial interests. We are talking about a great deal of detail being given. Such areas could include sales and profits forecasts, and information on profits on individual segments of the market to a level not required to be published in any statutory accounts but which could be of great value to competitors.
The exact definition of what generally constitutes "commercially sensitive information" is very difficult to render precisely. I accept the spirit of some of the comments made about it being used in the past as a blanket term and an excuse for not being as transparent as we could be. In that connection, a minimum definition needs to take account of information which, were it to be disclosed, would at least be likely to result in damage to suppliers and manufacturers. Looking at it from the other end of the spectrum, it is easier to say what is not commercially sensitive and previous reports to Parliament achieved a great deal in describing the operation of the PPRS.
The amendment of the noble Lord, Lord Lucas, would require the Secretary of State to publish details of payments recovered under the statutory scheme arising from excess profits or prices and the publication of otherwise confidential directions made under Clause 31. It is our intention to publish all that can be published without breaching a tight definition of commercial confidentiality. It is important that decisions made under the voluntary arrangements or the statutory scheme are correct, correctly arrived at and can be seen to be so. But we do not want this to be an area of dispute with companies and the Secretary of State coming to different decisions in relation to confidentiality. We want to maintain a climate of confidentiality when it comes to individual suppliers and manufacturers, which is necessary if the operation of both the voluntary and the statutory schemes is to command the confidence of all interested parties.
An additional problem is that, should a supplier or manufacturer perceive a danger of disclosure of commercially sensitive information, he would be less likely to provide the information freely and frankly and therefore push us more into the statutory scheme.
877 The noble Lord, Lord Lucas, asked for an example of the circumstances where a company might not be a clear "sinner" but might have excess profits recovered from it. Excess profits do not necessarily mean that there has been a transgression of the statutory or voluntary scheme, or that prices have been increased without reference to the Government, or that information has not been disclosed. The profit derived from sales to the NHS can increase beyond what was expected because of unexpected changes in volume. In those circumstances it is right that excess profits should be paid back, but it could be commercially damaging if that was disclosed in terms of the individual company to which it applies.
I have some sympathy with the noble Lord's view in circumstances where companies increase prices charged to the NHS without the agreement of the Secretary of State. While it would be unwise to have such a requirement placed on the face of the Bill, it is certainly something at which we should look carefully in terms of future reports to Parliament on the operation of the schemes.
Directions are provided for so that the Secretary of State may communicate with a specific supplier or manufacturer other than by regulation, thereby respecting commercial confidentiality. In that regard the amendment would defeat the necessary mechanism and jeopardise the successful operation of the scheme.
I turn now to consultation. Clause 30, as amended, requires the Secretary of State to consult with the industry body before making regulations. The industry body is alone specified in Clause 30. That is common sense, given that it is the body which stands to be most affected by the implementation and operation of either a voluntary or statutory scheme. But that does not mean that others—consumers in particular—are not affected by those schemes. Nor does it mean that the views of other interested parties will not be sought by the Secretary of State. He is free to consult more widely than with the industry and I am certain that he will consult interested parties appropriately.
I am not convinced that there is a need to put requirements to publish details of the outcome of such consultations on the face of the Bill though, as I said at Committee stage, we have made it absolutely clear in most responses that the Government intend to consult the representatives of patients. The outcome of consultations in those cases will be the schemes themselves. Their form and content will be a clear indication of what the Secretary of State decided after consulting with interested parties. It always remains open for his decisions to be questioned here or in another place. I am not sure that there is value in his being required to describe those decisions separately.
Equally, on the question of an independent audit, I am not sure that we need new mechanisms specifically directed towards the operation of those schemes. The National Audit Office is a highly competent and respected body which has the required expertise and experience to deal effectively with the audit of the schemes. I trust that my noble friend will accept that that body, in undertaking an audit and publishing its 878 findings, will provide more than adequate assurance that the operation of the schemes will be properly scrutinised.
I hope that I have convinced your Lordships that, in urging noble Lords to withdraw the amendments, we are absolutely clear that we wish to move towards more transparency, giving more information in these areas, and that we will not be using the limited circumstances of commercial confidentiality as some sort of blanket exemption to shroud the operation of these schemes in any kind of unwarranted mystery.
§ Lord DesaiMy Lords, I am grateful to my noble friend the Minister as well as to all noble Lords who took part in this debate. One way to measure the usefulness of an amendment is to measure the proportion of the mover's time as compared with that of everybody else, including the Minister. In that respect the multiplier has been very high. I am especially grateful to my noble friend for a careful, detailed and thorough answer. It has put many of my concerns at rest and it is therefore with pleasure that I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause 29 [Statutory schemes: supplementary]:
§ Baroness Sharp of Guildford moved Amendment No. 62:
§ Page 22, line 33, after ("body") insert ("and the National Institute for Clinical Excellence").
§ The noble Baroness said: My Lords, the brief point that I wish to make with this amendment is that NICE (the national institute of clinical excellence) is being set up under this Bill in order to develop a wide expertise about the relative efficacy of different therapies. In implementing a statutory scheme, which is what this part of Clause 29 is about, it is important to include NICE within the consultations as well as the industry itself. The amendment seeks to ensure that such consultation is written on the face of the Bill. I beg to move.
§ Lord Walton of DetchantMy Lords, I fully understand why this amendment was tabled, but I find it difficult to support it, if only for one important reason.
NICE is a body which is to be established to be pro-active and not reactive. In other words, its responsibilities will include examining different forms of medicine and treatment to be available to the National Health Service; to look at the validity of that treatment and its cost-effectiveness. As I understand from public statements made by Sir Michael Rawlins, its chairman, it will be examining whether it is appropriate, within the NHS, for a specific treatment to be made available and whether it will be cost-effective for a specific group of patients.
To impose upon NICE the responsibility of reacting to consultations with the pharmaceutical industry in relation to issues set out in the Bill, would be an inappropriate measure. Solely for that reason I find it difficult to support the amendment.
§ Baroness HaymanMy Lords, I agree with the noble Lord, Lord Walton of Detchant. We all accept that 879 consultation is a good idea, but if we write on the face of the Bill that a body is to be statutorily consulted, we must make sure that it is appropriate that that body should be so consulted.
In this case we are talking about the imposition of a statutory scheme which will be necessary if there is a failure to arrive at an overall voluntary agreement with the pharmaceutical industry, or if an individual company or companies fail to abide by the terms of such agreement. It is hoped that we will not get into that situation, but were that to happen, the form of such agreement would mirror those previous agreements which existed between the Government and the pharmaceutical industry over the years. That is to say, it would aim to ensure that the prices paid by the NHS for its medicines were fair and reasonable, having regard to the overall profits made by a supplier from its trade with the NHS. Of course, we would be looking at issues about appropriate recognition of research and development. Alternatively, if that supplier exceptionally refused to supply information necessary to make a determination, consideration would then be given to the reasonableness of the prices paid for individual medicines.
However, the real focus of Clause 29 is the measures that would be needed in practical terms to introduce such a statutory scheme; for example, what information might be needed before a scheme was in place? In matters such as these it is reasonable to be required on the face of the Bill to consult the industry body; but, as I said in reply to the amendment of my noble friend Lord Desai, the Secretary of State is free to consult whoever he wishes. But, for the reasons explained by the noble Lord, Lord Walton of Detchant, I am not sure that NICE is the right body. The clause is concerned with procedural matters which I believe are outside that body's immediate remit. I therefore urge the noble Baroness to withdraw the amendment.
§ Baroness Sharp of GuildfordMy Lords, I thank the Minister for her reply. I take on board the fact that, as she said, the Secretary of State is free to consult whosoever he wishes in relation to setting up a statutory scheme. Therefore, if it were appropriate to consult NICE on such an occasion, he would do so. In the light of that assurance, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Baroness Hayman moved Amendments Nos. 63 and 64:
§ Page 22, line 35, after ("scheme") insert ("or of a limit under section 27").
§ Page 22, line 38, leave out from ("person") to second ("to") in line 39 and insert ("to whom such a scheme or limit may apply").
§ On Question, amendments agreed to.
§ Clause 30 [Enforcement]:
§ Earl Howe moved Amendment No. 65
§ Page 23, line 2, leave out ("£100, 000") and insert ("£50, 000").
§ The noble Earl said: My Lords, I shall be brief with this amendment. First of all, I should be grateful to know what considerations led the Government to propose levels of financial penalty in this part of the Bill 880 that appear, at least to me, extremely steep. For example, what bench-marks did they use, and why? Further, what principles will govern the imposition of particular levels of penalty within the maxima laid down?
§ My second concern bears directly upon the latter, although it relates more to subsection (3). I hope that the Minister is in a position to answer a few questions in that respect. The ability of the Secretary of State to impose a surcharge of 50 per cent. of whatever penalty arises from subsection (2) is a seemingly draconian provision. It is certainly not a provision which, if it were inserted into a private contract, would be likely to be upheld by the courts. Can the Minister say what the model is for that provision and what precedent there is for it?
§ The only parallel of sorts that I have been able to find is in VAT legislation, but that is surely a poor model for legislation that has nothing to do with taxation; indeed, this is legislation which seeks to regulate the pricing of pharmaceuticals. The penalties are not a tax. Can the Minister say what will govern the imposition of a 50 per cent. surcharge? Moreover, does not the Minister think that such a power is inherently incompatible with the spirit of a voluntary scheme?
§ I realise that I am guilty of straying outside the strict confines of the amendment on the Marshalled List, and I apologise for that fact. However, this question is intimately bound up with the absolute level of penalties laid down in the Bill, and I believe that we should look at the whole question in the round. I am uneasy about the amounts which might be charged to a pharmaceutical company under Clause 30. Therefore, I beg to move.
§ 6.45 p. m.
§ Baroness HaymanMy Lords, the noble Earl asks what considerations were taken into account when setting the level of these penalties. The considerations were to ensure that they were effective and that they were of a sufficient amount that those who might contravene any provision of regulations or directions under Clauses 26 to 29 would wish to avoid incurring them. However, I recognise that they must not be out of proportion to what is needed. It was finding the balance in respect of those considerations which led us to the amounts set out in the clause.
The NHS spends billions of pounds each year on medicines. Several companies have sales in excess of "100 million. Many companies derive annual profits of tens of millions of pounds. Over 500 medicines have sales to the NHS of £1 million individually. I would ask noble Lords to bear those figures in mind when looking at these penalties. I should also like noble Lords to recognise that amounts stipulated in subsection (2), at which this amendment is directed, are the maximum amounts of those penalties.
It is not the intention to use the maximum amount in all, or possibly in any, cases, but there remains the need to have an effective deterrent against the non-compliance which we have seen with earlier schemes. Clearly the amount of the penalty will be 881 affected by the amount of excess profit or prices made or charged by a non-compliant supplier or manufacturer. That, in turn, will be influenced to a great extent by the level of sales. The detail of how the level of penalties for a given case will be determined will be contained in regulations. Amendment No. 68 to Clause 30 also means that the Secretary of State must consult with the industry body before making such regulations. I remind noble Lords that we have also introduced an amendment which means that these maximum penalties cannot be increased other than by the affirmative resolution procedure.
I have to say that the proposition that the survival of a supplier or manufacturer with sales of, say, in excess of £50 million to the NHS each year is going to be jeopardised by penalties in the range up to those specified is not one that I believe to be realistic. I believe that we have reached an appropriate point.
Perhaps I may now deal with the penalties uplift issue raised by the noble Earl. Clause 30(3) provides that where a supplier or manufacturer increases the price of a product under the statutory element of a voluntary scheme or under a statutory scheme, the amount required to be repaid may be increased by an amount not exceeding 50 per cent. This means that a company which contravened regulations made under these provisions would be liable to repay the amount overcharged to the NHS as a result of the unapproved increase and the penalty of up to 50 per cent. of that amount, plus an interest charge to be specified in regulations.
As I said, the purpose of penalties is to deter companies increasing prices outside the terms of a voluntary agreement or a statutory scheme. What is required is a scale of penalties which is sufficiently flexible to accommodate various types and sizes of transgression. Persistent offenders, or particularly large price increases implemented without the agreement of the Secretary of State, would face higher penalties.
It seems obvious to me that a penalty of £10, 000 per day or a single penalty of £100, 000, as provided for in Clause 30(2), would be an inadequate deterrent against unapproved price increases which might cost the NHS millions of pounds before the excess could be recovered. In all the circumstances, we believe that these arrangements are proportionate.
In terms of the voluntary scheme, these penalties can only be used where a company disregards the terms of that scheme, which would be contrary to the provisions and the spirit of it. In such circumstances, it is reasonable for there to be adequate powers to deal with companies that flout the terms of a voluntary agreement. I hope that my response explains the thinking behind the clause to the noble Earl.
Earl HoweMy Lords, I am grateful to the Minister, especially for what she said about the flexibility inherent in the system and for what I understood her to say about tailoring the penalties to suit each situation. Her remarks merit careful study. Therefore, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 66 not moved.]
882§ Baroness Hayman moved Amendment No. 67:
§
Page 23, line 11, at end insert—
("
and in this subsection "specific" means specified in the decision.
§ [Amendment No. 67A, as an amendment to Amendment No. 67, not moved.]
§ On Question, Amendment No. 67 agreed to.
§ Baroness Hayman moved Amendments Nos. 68:
§ Page 23, line 13, at end insert ("and the Secretary of State must consult the industry body before making any regulations under this section").
§ On Question, amendment agreed to.
§ Clause 31 [Controls: supplementary]:
§ Baroness Hayman moved Amendments Nos. 69 to 72:
§ Page 23, line 19, leave out ("particular") and insert ("specific").
§ Page 23, line 21, leave out ("particular") and insert ("specific").
§ Page 23, line 21, at end insert ("and in this subsection "specific" means specified in the direction concerned").
§ Page 23, line 28, leave out from ("powers") to ("are") and insert ("to refuse approval under section 26(4)(a) or 28(6)(a) or to impose a limit under section 27(a) or 28(1)").
§ On Question, amendments agreed to.
§ Baroness Hayman moved Amendment No. 73:
§ Page 23, line 32, at end insert ("and in so exercising those powers (in the case of sections 27(a) and 28(1) and (6)(a)) the Secretary of State and any other person must bear in mind, in particular, the need for medicinal products to be available for the health service on reasonable terms and the costs of research and development").
§ [Amendment No. 73A, as an amendment to Amendment No. 73, not moved.]
§ On Question, Amendment No. 73 agreed to.
883Lord Lucashad given notice of his intention to move Amendment No. 74:
Page 23, line 32, at end insert—("( ) The Secretary of State shall publish details of any payments made under sections 28(4) and (5) and of any directions given under this section, but such publication may not include information supplied to the Secretary of State by a manufacturer or supplier commercially in confidence. ").The noble Lord said: My Lords, I thank the noble Baroness for the answer she gave me when she replied to the amendment in the name of the noble Lord, Lord Desai, with which this amendment is grouped. I shall read that with great interest. I thank the noble Baroness again for that. I shall not move the amendment.
§ [Amendment No. 74 not moved.]
§ Baroness Hayman moved Amendments Nos. 75 and 76:
§ Page 23, line 41, leave out from ("product") to ("used") in line 42.
§ Page 24, line 2, at end insert—
§ (""medicinal product" has the meaning given by section 130 of the Medicines Act 1968, ").
§ On Question, amendments agreed to.
§ Clause 32 [Evasion of charges etc.]:
§ Lord Hunt of Kings Heath moved Amendment No. 76A:
§ Page 24, leave out lines 9 to 15 and insert—
§
(""Recovery of other charges and payments.
122A. —
the amount mentioned in subsection (2) below is recoverable summarily as a civil debt from the person in question by the responsible authority.
to be exercised on behalf of the authority by another health service body.
Penalties.
122B. —
a notice (referred to in this section as a penalty notice) may be served on the person by the responsible authority requiring him to pay to the authority, within a prescribed period, that amount together with a charge (referred to in this section as a penalty charge) of an amount determined in accordance with the regulations.
§ Offences.
§ 122C.—(1) A person is guilty of an offence if he does any act mentioned in subsection (2) below with a view to securing for himself or another—
- (a) the evasion of the whole or part of any charge under this Act in respect of the provision of goods or services to which section 122A above applies,
- (b) the reduction, remission or repayment of any such charge, where he or (as the case may be) the other is not entitled to the reduction, remission or repayment,
- (c) a payment under this Act (whether to, or for the benefit of, himself or the other) in respect of the cost of obtaining such goods or services, where he or (as the case may be) the other is not entitled to, or to the benefit of, the payment. ").
§ The noble Lord said: My Lords, this group of amendments introduces further sanctions to deal with incorrect claims to exemption from NHS charges. They amend and add to Clause 32 and introduce a new clause after Clause 46 in Part II of the Bill. These measures support the Government's comprehensive strategy to tackle fraud and charge evasion in the NHS.
§ In order to deter the evasion of NHS charges, it is important that there are sanctions available which are both appropriate to the scale of the offence and cost-effective to administer. Clause 32 already creates a new criminal offence of knowingly making a false claim for exemption from an NHS charge or knowingly making a false claim for payment towards the cost of an 886 NHS charge or service. Due to the differences with Scottish law, there is no need to replicate this provision in Part II for Scotland.
§ As NHS charges involve relatively small sums, it would not be practicable to prosecute most individual cases. For this reason, the amendments introduce a new civil penalty charge in England and Wales and a similar penalty charge in Scotland. It would be the sanction normally imposed where a person fails to pay an NHS charge or claims a payment to which he is not entitled towards the cost of an NHS charge or service. The penalty charge, like the offence, would apply to charges for prescriptions, dental services and optical services, including those provided for hospital out-patients, as well as payments or benefits such as optical vouchers.
§ It may be helpful if I explain how it is intended to work. I will use the prescription system to illustrate this. Patients who do not have to pay prescription charges are required to indicate on the prescription form the reason for their exemption and to sign a declaration to that effect. Exemption is granted to patients for a number of reasons, including age, certain medical conditions or where the patient is claiming one of a number of benefits or is on a low income. Unfortunately, a large number of exemption claims are made falsely. We estimate that every year in England and Wales alone about £150 million is lost through people evading payment of the prescription charge when they have no right to exemption and should pay.
§ In this situation, and where checks show that a claim for exemption is incorrect, a penalty notice would be sent requiring the patient to pay the original charge and an additional penalty. The amount of the penalty and the period within which payment must be made will be stated in regulations setting out the detailed arrangements for each service. But the maximum amount of the penalty charge is clearly set out in the amendments at £100, or five times the unpaid charge, whichever is the less.
§ For evasion of the prescription charge—which currently stands at £5.80—this would mean that a penalty notice would be served requiring the payment of a £29.00 penalty plus the repayment of the £5.80 which should have been paid in the first place, making a total of £34.80. The amendments allow that the maxima of £100 for the penalty charge and the multiple of five may be changed by order. Such orders would be subject to affirmative resolution, which would allow the opportunity for appropriate scrutiny in your Lordships' House and in another place. This would allow the potential for revision of the penalty charge maxima and multiple from time to time, for example, to keep pace with inflation or to take account of our experience in operating this scheme.
§
Following the issuing of a penalty notice we would intend to allow 28 days for payment to be made. If the penalty charge is not paid within this period, a surcharge would be made of up to 50 per cent. of the penalty charge. If payment is still not forthcoming after a further 14 days, the total debt would be pursued through the civil courts. Liability for the penalty would normally be
887
incurred simply by an incorrect claim to exemption. The amendment provides that a patient may offer a defence that he did not act,
wrongfully, or with any lack of care".
This would cover such cases as a patient acting on wrong official advice or a patient's representative acting on wrong information provided by the patient.
§ A patient may make representations as soon as he receives a penalty notice if he believes it is incorrect. There will be an internal process to reconsider the correctness of the penalty, making additional checks as necessary, for example with the DSS if the patient claims to be receiving a benefit. The whole procedure will be carefully monitored. Any patient who wishes to challenge liability for the penalty charge in England and Wales will be able to do so in the county court; or in Scotland in the sheriff court. This right of access to an independent hearing will satisfy the demands of natural justice and fulfil the requirements of the European Convention on Human Rights.
§ Where a patient has a representative—for example, where an individual goes to a pharmacist to have a prescription dispensed and signs for exemption on the back of the form on the patient's behalf—and a penalty notice is issued, they would, together, be held responsible for payment "jointly and severally". In practice, either the patient or the representative could be held liable to pay the penalty, according to the circumstances, but as only one incorrect claim had taken place, only one charge would be payable. The provision of this financial penalty charge would allow use of the criminal offence under this clause to be reserved for those more serious cases where intentional, fraudulent evasion of an NHS charge is clear. In practice, this will be where evasion has happened repeatedly or persistently. A clear safeguard is provided to ensure that a person cannot, in respect of the same incident, be both liable to pay a penalty charge and convicted of the new offence.
§ I should like to make clear that it is only a small minority of patients who abuse the National Health Service, but I believe we owe it to the vast majority of honest NHS patients to do all we can to stop abuse. This is money that should be going into patient care, not into people's pockets. The new measures in Clause 32, 33 and 46, and also the amendments, show our commitment to tackle all types of fraud and charge evasion in the National Health Service. The Government are investing in measures for the greater detection of those who evade charges. However, for maximum effective deterrence it is vital that detection is backed up by appropriate sanctions and redress. These amendments are essential to deal with those who deliberately set out to cheat the National Health Service. If we wish to tackle charge evasion against the NHS, we must provide the right tools to do this. I beg to move.
Lord RentonMy Lords, I do not have a point to make which will affect the National Health Service, but I have a drafting point to make which I make with some 888 seriousness. I make it because there are too many occasions in this Bill and in other Bills in which, although primary legislation deals with most of the matter, nevertheless power is given to make regulations which in this particular case—I shall draw attention to the detail in a moment—seems a quite unnecessary power.
On the third page of the amendment on the Marshalled List—on page 9—under the heading "Penalties" new Section 122B is proposed to the 1977 Act. The proposed new Section 122B states:
Regulations may provide that, where a person fails to pay—a notice may be served within a prescribed period. Frankly, most of what is going to be relevant is already set out in the proposed new section. The idea that it should need to be amplified by regulation seems to me to be very strange because the regulations will have little more to do. I know that it is not part of the ministerial responsibilities of the noble Lord who moved the amendment, but I hope that he will carry the message to officials advising him, and especially to parliamentary counsel, and point out that there should be no necessity to make regulations when practically all of what is needed can be stated in primary legislation.
- (a) any amount recoverable from him under section 122(1) above …
- (b) any amount recoverable from him under section 122A",
There are other examples to come—I shall not bore your Lordships with the earlier examples. Some are in the Bill and some are in the amendments. I picked this out as a very obvious example of a clause in which the whole of the law could be perfectly well stated in the primary legislation without the need to amplify it by regulations.
§ 7 p. m.
§ Baroness Carnegy of LourMy Lords, the noble Lord's strictures will, I am sure, be heard by the Government. I wish to ask a simple, practical question. I am one of those people who has occasionally to get some medicament or other with a prescription, and I sign a form to say that I am a pensioner. You can tell by looking at me that I am a pensioner. I know the chemist, who probably knows the year in which I was born and a good deal more about me than I would like to think. Many people are not like that. I was surprised when the Minister said that very few people dodge payment in this way. It is an enormous temptation and the Government are absolutely right to do something about it. I have often wondered why there was not a sanction.
I should like to know how the system will work. To begin with, how will people know that it has come into being? How will they know what it will cost them if they get it wrong? Will it be set out in enormous letters on every counter? Will the pharmacist be obliged to tell the customer that this is the case? It is only right that it should be very obvious indeed and well publicised. How will the penalty, if there is one, be paid? Will it be paid over the counter to the pharmacist? Who will issue the penalty? Who will receive the payment? Where will it 889 go? These matters may be mentioned in the amendment but I have had great difficulty in discovering exactly how it will work.
Will the pharmacist be obliged to tell the customer that an item can be bought more cheaply over the counter than £5.80 if there is the ordinary exemption? I am not sure whether the pharmacist is obliged to do that at the moment. I think not. For example, if one is prescribed Aspirin, one can buy 100 Aspirin, I think, for 90p. But it would cost £5.80 if one bought it on prescription. If one takes an Aspirin a day, as many of us do, will the pharmacist be obliged to tell one about that? That question is linked. I hope that I am not being dim about this, but I should like to know the answers.
§ Baroness FookesMy Lords, I am as anxious as anyone to avoid fraud. It has always seemed to me that, with prescriptions, it is extraordinarily easy to be fraudulent if one so chooses. I am interested in detection. It does not matter how great is the scale of charges or how fearsome it all looks; if there is to be no means of finding out easily whether people are defrauding the NHS, all these penalties will be of no use. Perhaps the Minister could expand a little more on that point.
§ Lord Brougham and VauxMy Lords, like my noble friend, I, too, do not want fraud to appear. I mentioned to the noble Baroness, Lady Jay, when she was in the shoes of the noble Baroness, Lady Hayman, that I used to have a pre-payment prescription form which lasted for a year. One paid one's money up front and then one would get one's prescription for a year. At the end of the year I never received a reminder that that pre-payment prescription form had expired. Occasionally, when one keeps it in one's wallet, for example, one cannot see the date on the form properly. If we want to stop fraud, why do not the people who issue these pre-payment forms send out a reminder to people that their form has run out of date and that they have to renew it?
§ Lord Clement-JonesMy Lords, I rise briefly to say that I share some of the reservations about the amount of practical detail that the Minister has made available. I certainly believe in the spirit of the amendment. It is quite clear that this is something which probably should have been on the statute book some years ago. I thank the Minister for his very clear exposition when he moved the amendment and I hope that he will give some more practical details. As I understand it, we are creating a new criminal offence. It is of significance that we are doing so. The mechanics of how notices are to be issued, by whom and in what circumstances are clearly important. The noble Lord, Lord Renton, made an interesting point about the drafting. It seems to me that the primary legislation contains all that is required. I do not understand why there is reference to regulations. It is belt, braces and suspenders—the whole shooting match 890 really—which is interesting in a piece of legislation. But generally we on these Benches welcome the amendment.
§ Baroness Masham of IltonMy Lords, I wish to ask a very brief question. This change should be made clear to patients. But as so many people have language difficulties, will it be made clear in different languages?
Earl HoweMy Lords, I wish to ask the Minister a very brief question following on from what the noble Lord, Lord Clement-Jones, said. Are we talking about a new criminal offence or about a set of administrative penalties? That is what I understood us to be talking about.
§ Lord Hunt of Kings HeathMy Lords, this has been an extremely interesting debate. I shall attempt to answer the points that have been raised. I have not been in your Lordships' House very long but I know that when the noble Lord, Lord Renton, rises to question a piece of legislation your Lordships pay that matter full attention. In relation to the specific point that the noble Lord raised, I am advised that the regulations contained in the clause to which he referred were to allow administrative procedures for sending out and collecting the penalty notice. They are to give flexibility to, for example, changing the time limit for sending the notice in the light of experience. They are also for setting the different times for different services; for instance, contrasting between a general medical prescription and dental services. Nonetheless, I shall take back the more general point that the noble Lord raised.
I have been asked a number of questions about the extent of false claims. It was right for me to say that the vast majority of NHS patients are honest. However, the estimate that I originally gave in relation to the potential loss of £150 million was based on an investigation by the Prescription Pricing Authority's fraud investigation unit. It undertook a check over a two-month period and in that period estimated that false claims amounted to 7 per cent. As noble Lords can see, that is quite a high percentage and it is essential that we deal with it.
In relation to what is to be done about it, it is important to say that the position arising from these amendments is but one step in a number of actions that are being taken. The Prescription Pricing Authority's fraud investigation unit will institute more checks in the future. In addition we are introducing dispensing checks in pharmacies in the future and those will provide for the simple verification of claims to exemption within the pharmacy. The pharmacist or a dispensing doctor will ask the patient claiming exemption from the prescription charge if they have supporting evidence for exemption. If the patient does not have the evidence available the pharmacist will mark the prescription form to show no evidence. This will allow subsequent checks of exemption claims by the Prescription Pricing Authority's fraud investigation unit.
In ensuring that through these measures we reduce the degree of evasion in the National Health Service, it is important that we make it abundantly clear to users of the service that we shall introduce this new system. It is 891 intended that an advertising campaign to target prescription evasion will be instituted for a four-week period from the middle of March. Leaflets will be available to the public in pharmacies and surgeries. We will also be advertising in national magazines and women's magazines. I take on board the point made by the noble Baroness, Lady Masham, concerning the need to ensure that the leaflets are in a number of languages. It is something that I will take back to the Department of Health.
The noble Baroness, Lady Carnegy, asked whether pharmacists should be obliged to tell patients with prescriptions that they can buy cheaper medicines over the counter for less than £5.80. I do not have an answer for her at this stage and I hope she will allow me to write to her on that point. In relation to the question of prepayment certificates, health authorities often issue reminders when they expire, but they are not obliged to do so. I very much take the point and we would encourage the issue of reminders by health authorities; but the responsibility to renew a prepayment certificate is clearly that of the holder.
§ Lord Brougham and VauxMy Lords, reverting to what the noble Lord said earlier regarding the pharmacist asking for proof, I have now reached the stage where I do not have to pay for my prescription but I do not have any proof that I have reached the age of 60. It is only that those at the pharmacy know me. If I went to another one, how should I be able to prove that I can get my prescription free?
§ Lord Hunt of Kings HeathMy Lords, there are various ways in which one might offer proof; for example, a driving licence which might have one's date of birth on it. The important point is that if a customer does not have evidence on him or her to prove that, it does not mean that the prescription will not be given to that patient. Indeed it will be. A mark will be made on the form enabling the exemption claim to be checked in a future improved and developed checking system. I hope that I have answered most of the points. I am advised that it is not a criminal offence, as was suggested, and I beg to move.
§ On Question, amendment agreed to.
§ 7.15 p. m.
§ Lord Hunt of Kings Heath moved Amendment No. 76B:
§
Page 24, line 43, at end insert—
("(7) Where, in respect of any charge or payment under this Act—
he shall not, in a case within paragraph (a) above, be liable to pay any such penalty charge or further sum by way of penalty or, in a case within paragraph (b) above, be convicted of such an offence. "").
§ On Question, amendment agreed to.
892§ Lord Hunt of Kings Heath moved Amendment No. 76C:
§
Page 25, line 3, at end insert—
("(3) Sections 122A to 122C of the 1977 Act apply to charges which may be made and recovered under section 20 of the National Health Service (Primary Care) Act 1997 as they apply to charges under the 1977 Act which may be recovered under section 122(1) of that Act; and the reference in section 122A(7)(a) to the 1977 Act includes a reference to a pilot scheme (within the meaning of the 1997 Act). ").
§ On Question, amendment agreed to.
§ Clause 33 [Disqualification etc. of Part II practitioners]:
§ Lord Hunt of Kings Heath moved Amendment No. 76D:
§ Page 25, line 10, leave out from ("receive") to end of line 18 and insert ("from a Health Authority representations that—
- (a) a person who is included in any list meets either of the conditions for disqualification, or
- (b) a person who has applied to be included in any list meets the second condition for disqualification, ").
§ The noble Lord said: My Lords, Clause 33 already provides for new powers for the NHS tribunal to disqualify Family Health Service practitioners who commit fraud against the NHS. These clauses and amendments are put forward as part of the Government's strategy for countering fraud in the National Health Service. I shall be speaking in some detail about the overall purpose of these clauses, as we have not had the opportunity to debate them previously. I want to set the Government amendments in context.
§ As in our previous debate, there is general agreement that fraud in the NHS is unacceptable. These clauses expand the role of the NHS tribunal to allow it to deal specifically with fraud among the independent family health service practitioners. The NHS tribunal is an independent non-departmental public body with judicial powers. It derives its powers from the National Health Service Act 1977 and, like the Act, covers England and Wales. The tribunal is the ultimate NHS disciplinary body for family health service practitioners on a health authority's medical, dental, pharmaceutical or ophthalmic list. It is a very small minority of practitioners who abuse the NHS in this way. The vast majority are honest and hardworking. I am sure noble Lords will agree that, however small the minority, this activity cannot be tolerated.
§ Currently the NHS tribunal decides whether the continued inclusion of an FHS practitioner's name on a health authority's list would be prejudicial to the "efficiency" of the service in question. If it does so decide, it must direct that the practitioner is disqualified from providing the service.
§ This efficiency regime has meant that health authorities have generally sent cases to their tribunal about practitioners' standard of practice rather than any fraud they may have committed. Clause 33, together with these amendments, introduces an explicit power for the tribunal to tackle fraud. The new power is clearer and more wide-ranging than could be achieved through the efficiency regime, and will give health authorities, via the independent NHS tribunal, a clear route to deal 893 with fraudulent FHS contractors. This clause will not change the constitution or composition of the tribunal, but does extend its role.
§ The clause allows a fraud case to be referred to the NHS tribunal where a practitioner has applied to be included on a health authority's list, as well as when they are already on the list. This is important as there are instances currently where health authorities may be obliged to engage a practitioner, even one who has made dishonest claims on the NHS.
§ The existing sanction of interim suspension under the efficiency regime will also apply to fraud cases where there is a significant risk that a fraud will continue or that the investigation of the case will be prejudiced. This also will be important as we are aware of fraud cases where the investigation may indeed have been prejudiced because, for example, the practitioner has continued to practise while awaiting a criminal trial, enabling him to continue to deal with patients or staff who are potential witnesses.
§ The existing sanctions of local, national or total disqualification (a declaration of unfitness) which can be applied by the NHS tribunal for cases under the existing efficiency regime are applied in relation to cases for the new fraud regime. Clause 33 also introduces a new sanction, which can in future be applied by the NHS tribunal for both efficiency and fraud cases of "conditional disqualification".
§ Conditional disqualification gives the tribunal a new flexibility. Under this new sanction a tribunal could disqualify a practitioner but provide that the disqualification shall take effect only if the practitioner fails to comply with conditions imposed by the tribunal. That allows the individual to continue practising within those conditions.
§ For example, if a dispensing GP had used his or her dispensing activities to commit fraud, the tribunal could insist that the right to dispense be withdrawn. If the practitioner broke the specified terms, the tribunal could reconsider its decision and, for example, allow the original disqualification sanction to take effect.
§ The Government are determined to root out fraud against the NHS. As a result, the NHS tribunal can rightly take severe measures to deal with it. Nevertheless, we do not wish to treat family health service practitioners unjustly. This clause provides that no sanction should be applied where it would be unjust to do so.
§ Perhaps I may briefly explain some of the main points that the amendments deliver. Noble Lords will note that the majority of the amendments are textual changes which are consequential to the larger changes. Amendment No. 76J allows the NHS tribunal to disqualify bodies corporate which commit fraud from providing general ophthalmic or pharmaceutical services in the family health services. The amendments provide that disqualification will apply if any director or any person controlling the body corporate or ophthalmic and pharmacy business respectively meets the condition for disqualification, whether or not he was a director or person controlling the body corporate when he first met the condition. It is clearly necessary, for example, to 894 prevent a practitioner who has been disqualified for fraud from setting up a company in order to be able to practise again in the family health services.
§ Amendment No. 76J also provides for liability to fall on the practitioner for the conduct of employees or deputies in fraud cases, where the practitioner has failed to take reasonable steps to prevent this. We believe that these powers are necessary for the prevention of fraud.
§
Amendment No. 76F makes changes to the definition of fraudulent conduct by the practitioner which would lead to disqualification. This still includes a. "mental element", but this is now "knowledge". The amended condition for disqualification would be that the practitioner knew that he was not entitled to the benefit, which he secured or tried to secure. His knowledge would have to be proved to the satisfaction of either tribunal. The definition in the current clause,
that a person … has fraudulently acted in a way detrimental to any health service",
is not commonly used in legislation and could, in our judgment, make it difficult for the tribunals to decide whether the test had been met. The amendment provides a clearer definition against which the NHS tribunals would test the conduct of practitioners.
§ This and the following amendment, Amendment No. 76G, also clarify the kinds of acts which might constitute fraud against the NHS or another publicly funded health service. These acts could include securing a benefit for another person or attempting fraud.
§ The phrase "detriment to a health scheme" (in new subsection (5B) of Amendment No. 76G) is now defined as including detriment, not only to a patient, but also, as amended, to another person working in that scheme. This provision is to capture a particular type of fraud. Some general medical services, such as capital ion fees, are funded on a "pool" arrangement—there is a fixed overall budget and GPs in effect defraud their colleagues if they register non-existent patients. We believe that that is also unacceptable, even though there is no net loss to the NHS, and so it would be caught by the amended clause.
§ Amendment No. 102A provides procedures for the application to England and Wales of decisions of the NHS tribunals for Scotland and Northern Ireland. Decisions by any of the NHS tribunals for national disqualification already apply automatically in each country. The amendment would provide for a decision for total disqualification by the NHS tribunals for Scotland and Northern Ireland to be recognised similarly. The amendment also allows for the conditions specified in a conditional disqualification given by the NHS tribunal in Scotland or Northern Ireland to be translated for equivalent effect in England and Wales.
§ There are a number of more technical amendments, including those on procedures of the NHS tribunals. For example, Amendment No. 76ZC, which provides for the conditions for a health authority to request a review of a conditional disqualification, are now set out in detail. Amendment No. 102A to Schedule 4 allows the tribunal to make appropriate arrangements to manage two inquiries about the same practitioner when they are running concurrently.
895§ Noble Lords will be aware that Clause 46 delivers the same new powers to tackle fraud to the NHS tribunal in Scotland as Clause 33 gives to the tribunal in England and Wales. I should like to take this opportunity to inform the House on behalf of my noble friend Lord Macdonald of Tradeston that he is looking to bring forward similar amendments to the Scottish tribunal at Third Reading to those I am bringing forward today.
§ These amendments are an essential part of the Government's programme to deal with those practitioners in the family health services who defraud the NHS. It is important, if we are to tackle fraud in the round, that we must also tackle fraud committed by practitioners. These amendments do not change the fundamental purpose or impact of Clause 33, but they are needed for clarity and to ensure that the clauses work as intended.
§ I apologise for taking up so much time in explaining these amendments. I beg to move.
§ Lord Clement-JonesMy Lords, I thank the noble Lord for that lucid explanation which has made this set of amendments easier to understand. I thank the Minister also for the benefit of the newly "re-jigged" clause as a result of previous amendments. It is extremely helpful.
The newly amended subsection (4C) is particularly welcome, in that "knowledge" is now a requirement. That brings the provision much more closely into line with commonly accepted concepts of criminal law. That is particularly helpful. We strongly support the amendment.
§ Lord Hunt of Kings HeathMy Lords, I thank the noble Lord for those comments. I commend this amendment to the House.
§ On Question, amendment agreed to.
§ Lord Hunt of Kings Heath moved Amendments Nos. 76E to 76ZF:
§ Page 25, line 20, leave out ("representations within subsection (2)(a) above") and insert ("such representations").
§
Page 25, line 25, leave out from beginning to ("a") in line 30 and insert—
("where the representations are that the second condition for disqualification is met and regulations prescribe the time within which such representations are to be made, within that time.
896
(5)").
§
Page 25, line 41, at end insert—
("
and regulations may prescribe any scheme for the purposes of this subsection which appears to the Secretary of State to be a health or medical scheme paid for out of public funds.
§ Page 25, line 44, after ("sections") insert ("and Schedule 9 to this Act").
§ Page 26, leave out lines 1 to 41 and insert—
§ ("The NHS Tribunal: supplementary.
§ 46A.—(1) Where an ophthalmic optician is a body corporate, the body corporate is to be treated for the purposes of this group of sections as meeting the second condition for disqualification if any director meets that condition (whether or not he first met that condition when he was a director).
§ (2) Where a body corporate carries on a retail pharmacy business, the body corporate is to be treated for the purposes of this group of sections as meeting the second condition for disqualification if any one of the body of persons controlling the body corporate meets that condition (whether or not he first met that condition when he was one of them).
§ (3) A person who is included in any list ("the practitioner") is to be treated for the purposes of this group of sections as meeting the second condition for disqualification if—
- (a) another person, because of an act or omission of his occurring in the course of providing any services mentioned in section 46(5) above on the practitioner's behalf, meets that condition, and
- (b) the practitioner failed to take all such steps as were reasonable to prevent acts or omissions within section 46(4C)(a) above occurring in the course of the provision of those services on his behalf.
§ (4) The Tribunal is not required to inquire into a fraud case if they have previously inquired into representations in respect of the person concerned and the same acts or omissions.
§ (5) In a fraud case, regulations may make provision (including provision modifying the effect of this Part of this Act) for the purpose of securing that the person subject to the inquiry is not added to any list until proceedings in that case are finally concluded.
§ (6) For the purposes of this group of sections, in a fraud or efficiency case proceedings are finally concluded—
- (a) if the Tribunal determine not to exercise their power under section 46B(2) below, when they make that determination,
- (b) if they determine to exercise that power and no appeal is brought against the determination, at the end of the period for bringing an appeal,
- (c) if they determine to exercise that power and an appeal is brought against the determination, when the appeal process is exhausted.
§ (7) An inquiry under section 46 above is not affected by the person subject to the inquiry withdrawing from, withdrawing any application to be included in or being removed from the list to which the case relates.
§ Powers of NHS Tribunal.
§ 46B.—(1) Subsection (2) below applies where the Tribunal are of the opinion—
- (a) on inquiring into an efficiency case, that the person meets the first condition for disqualification,
- (b) on inquiring into a fraud case, that the person meets the second condition for disqualification.
§ (2) The Tribunal—
- (a) shall disqualify him for inclusion in the list to which the case relates, and
- (b) may disqualify him for inclusion in all lists within the same paragraph of section 46(5) above as that list. ").
§ Page 26, line 43, leave out from beginning to ("they") and insert ("(2)(b) above").
§ Page 26, line 45, leave out ("in question") and insert ("to which the lists in question relate").
§ Page 27, line I, leave out from ("section") to end of line 8 and insert ("shall have effect when proceedings in the case are finally concluded").
§ Page 27, line 9, leave out from ("disqualified") to end of line and insert ("for").
§ Page 27, line 13, leave out from ("The") to ("that") in line 14 and insert ("power to disqualify under section 46B above includes power to make a conditional disqualification, ").
§ Page 27, line 15, leave out ("they") and insert ("the Tribunal").
§ Page 27, line 23, leave out from ("any") to end of line 24 and insert ("acts or omissions within section 46(4C)(a) above, ").
§
Page 27, line 25, at end insert—
("( ) Conditions so imposed shall have effect when proceedings in the case are finally concluded.
( ) Section 46B(5) above applies to a conditional disqualification as it applies to a disqualification").
§ Page 27, line 26, leave out ("in writing").
§ Page 27, line 29, leave out ("or").
§ Page 27, line 33, leave out from ("References") to ("do") in line 34 and insert ("in any enactment to a disqualification by the Tribunal").
§ Page 27, line 39, leave out ("(whether or not conditional)") and insert (", conditional disqualification").
§ Page 27, line 40, after ("disqualified") insert ("or conditionally disqualified").
§ Page 28, line 5, leave out ("46B(2)") and insert ("46B(2)(a) above").
§ Page 28, line 7, leave out ("46B(3)") and insert ("46B(2)(b) above").
§ Page 28, line 9, leave out ("46B(3)") and insert ("46B(2)(b) above").
§ Page 28, line 11, leave out ("46B(3)") and insert ("46B(2)(b) above").
§ Page 28, leave out lines 13 and 14 and insert—
§ ("(3) If any Health Authority request a review of a conditional disqualification on the ground that—
- (a) there has been a change in the circumstances by reference to which the conditions were imposed,
- (b) the person concerned has failed to comply with the conditions, or
- (c) in a fraud case, the person concerned has since the Tribunal imposed the conditions (or made the disqualification conditional) again satisfied the second condition for disqualification,
§ ( ) In the case of a person who is providing services in Scotland or Northern Ireland, the reference in subsection (3) above to a Health Authority includes any corresponding authority under the: provisions in force in Scotland or Northern Ireland corresponding to this Part of this Act. ").
§ Page 28, line 20, leave out ("46B(2)") and insert ("46B(2)(a) above").
§ Page 28, line 22, leave out ("46B(3)") and insert ("46B(2)(b) above").
§ Page 28, line 25, leave out ("46B(3)") and insert ("46B(2)(b) above").
§ On Question, amendments agreed to.
§ Clause 41 [Duty of quality]:
§ Earl Howe moved Amendment No. 77:
§
Page 31, line 27, at end insert—
("(4) The Secretary of State may by regulations extend the duty in this section to Special Health Authorities of any particular description and to any independent hospital.
(5) In this section "independent hospital" means premises—
but excludes—
§ The noble Earl said: My Lords, this amendment, in one sense at least, mirrors my earlier Amendment No. 47 in that it seeks to impose the duty of quality in Scotland on the independent hospital sector.
899§ Having carried the House with me on the earlier amendment, I give notice that I propose to press this amendment. I shall not repeat the arguments that I advanced earlier in relation to England and Wales, but the amendment enables me to highlight the same issues in the context of Scotland, as well as a general issue relating to Clause 41.
§ There is no question in my mind that quality standards in the independent sector in Scotland are as much in dispute there as they are in England and Wales, and that a unitary framework of regulation for both the NHS and the independent sector would provide a necessary and welcome degree of assurance to patients in Scotland.
§ My general point takes the form of a question. How is it proposed that adherence to the duty of quality will operate in Scotland given that the commission for health improvement is to cover England and Wales only? How will quality standards be monitored? How will doctors and hospitals be inspected and audited on a basis comparable to that south of the Border? I beg to move.
§ Lord Clement-JonesMy Lords, I support this amendment as we supported Amendment No. 47 in relation to England and Wales. Exactly the same arguments apply. The argument having gone one way on Amendment No. 47, it would seem highly illogical for it not to go the same way in relation to this amendment. I hope that for the purposes of future argument on the Bill in another place, the Government will accept this proposal.
§ Baroness Carnegy of LourMy Lords, I support the amendment and I hope that the Government will accept it, the House having accepted Amendment No. 47. My noble friend asked how this will operate in Scotland. It seems to me that this is, like the other amendment, an enabling amendment. It would enable each special health board or NHS trust to put and keep in place arrangements for this purpose. Perhaps the Minister can tell us whether it will be left to the health board or to the trust to put these arrangements in place or whether it will be prescribed to them if the amendment is accepted. Obviously, he has not had time to think this through, but it would be helpful if we could have an indication. Quality in Scotland matters so much.
§ Lord Macdonald of TradestonMy Lords, as was said, the amendment covers similar ground to that covered by Amendment No. 47, debated this afternoon. It seeks to extend the duty of quality to special health authorities. This is unnecessary as the clause as drafted achieves this already. Scottish special health boards are the counterparts of special health authorities in England. There is no statutory provision for the creation of the latter in Scotland. Special health boards will be subject to the duty of quality under the terms of the Bill.
In reply to the noble Earl, Lord Howe, perhaps I should say a little more about the arrangements that we have in Scotland relating to quality. As I explained in Committee, we have the well-established Clinical Resource and Audit Group (CRAG). We are in the 900 process of establishing the clinical standards board for Scotland, which I am delighted to say that the noble Lord, Lord Patel, who spoke earlier today, has agreed to chair. These bodies are primarily concerned with the National Health Service, but their guidance and advice will be available to the private sector. We expect the private sector to take that advice and guidance fully into account.
The amendment also seeks to extend the duty of quality to independent hospitals, which it attempts to define. As was explained in Committee, we do not believe it would be appropriate to attempt to use the current Bill to place new statutory obligations on the independent sector. That will be a matter for the Scottish Parliament to consider in due course. No doubt it will wish to take account of the conclusions of the health committee's current inquiry into the regulation, monitoring and inspection of healthcare outside the NHS.
The guidance on clinical governance issued to the National Health Service in Scotland last November makes clear, however, that its provisions apply to services which the NHS commissions from other bodies. Thus, where the NHS contracts with a provider in the independent sector to provide a service to NHS patients, it should use those contracts to ensure that clinical governance principles are applied.
As your Lordships may be aware, my honourable friend the Minister for Health for Scotland published earlier this week a White Paper proposing new arrangements for the registration and inspection of nursing homes in Scotland. That would require a reconsideration of the current arrangements for regulating the private acute hospital sector. We expect the Scottish Parliament to take that work forward.
Your Lordships will understand the Government's reluctance to accept the amendment, given the earlier debate on Amendment No. 47. Furthermore, Amendment No. 77 does not properly reflect the Scottish legislation on these issues. However, in the light of the House's decision on Amendment No. 47, I am prepared to consider whether there are any further steps I can take to provide reassurance to your Lordships on this matter.
I should say, in reply to the noble Baroness, Lady Carnegy of Lour, that the Government have issued guidelines on clinical governance and that the clinical standards board will provide further guidance. If there is any detail that I have overlooked in that reply, I shall try to supply it to the noble Baroness in writing as soon as possible.
§ Baroness Carnegy of LourMy Lords, before the noble Lord sits down, is there any reason why the Government should not put an enabling clause into the Bill which the Scots Parliament could then pick up? With all the careful arrangements that the Parliament will have with regard to secondary legislation, it could then proceed with the matter. It seems to me that there should be the same provision for Scotland in the Bill in that respect as there is for England. I understand that the 901 arrangements will be totally different, but could there not be an enabling clause of that kind? I realise that this amendment is flawed.
§ Lord Macdonald of TradestonMy Lords, as I said in the light of the House's earlier decision on Amendment No. 47, I am prepared to look at the matter again. It will be one of the issues that we shall consider. I hope that I shall be able to provide reassurance to your Lordships on this matter.
Earl HoweMy Lords, I am grateful to the noble Lord for that assurance. In the light of that and of his clarification that the amendment is technically defective, I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Lord CarterMy Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion I suggest that the Report stage begin again not before 8.20 p. m.
§ Moved accordingly, and, on Question, Motion agreed to.