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Treasury Guarantees

Volume 131: debated on Wednesday 13 April 1988

The text on this page has been created from Hansard archive content, it may contain typographical errors.

`(1) At any time when the successor company is wholly owned by the Crown the Treasury may guarantee, in such manner and on such conditions as they think fit, the redemption or repayment of any stock issued or temporary loan raised by the successor company and the payment of interest on any such stock or loan.

(2) Immediately after any guarantee is give under this section the Treasury shall lay a statement of the guarantee before each House of Parliament, and where any sum is issued for fulfilling such a guarantee or a guarantee such as is mentioned in subsection (6) below the Treasury shall, as soon as possible after the end of each financial year, beginning with that in which the sum is issued and ending with that in which all liability in respect of the principal of the sum and in respect of interest thereon is finally discharged, lay before each House of Parliament a statement relating to that sum.

(3) Any sums required by the Treasury for fulfilling any guarantee given or treated as given under this section shall be charged on and issued out of the Consolidated Fund.

(4) If any sums are issued in fulfilment of any guarantee give or treated as given under this section, the successor company shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct, payments of such amounts as the Treasury may direct in or towards repayment of the sums so issued and payments of interest on what is outstanding for the time being in respect of sums so issued, at such rates as the Treasury may direct.

(5) Any sums received by the Treasury under this section shall be paid into the Consolidated Fund.

(6) Any guarantee given by the Treasury under section 7 of the National Health Service Act 1966 with respect to a liability of the Corporation which becomes a liability of the successor company by virtue of section 1 above shall be treated as if it were a guarantee given under this section.

(7) Any guarantee given or treated as given under this section shall be extinguished when the successor company ceases to be wholly owned by the Crown.

(8) The successor company shall be regarded for the purposes of this Act as wholly owned by the Crown at any time when each of the issued shares in the company and the whole of any stock issued by it is held by, or by a nominee of, the Secretary of State.'.— [Mrs. Currie.]

Brought up, and read the First time.

7.15 pm

The Parliamentary Under-Secretary of State for Health and Social Security
(Mrs. Edwina Currie)

I beg to move, That the clause be read a Second time.

With this it will be convenient to take the following:

Government new clause 13—Statutory accounts of the successor company.

Government new clause 14—Corporation Tax.

Governments amendments Nos. 20 to 22 and 24 to 27.

Amendment No. 41, in clause 3, page 2, line 27, leave out 'section' and insert 'sections'.

Government amendment No. 28.

Amendment No. 44, in page 2, line 45, at end insert—

'2B. The Corporation shall have the duty to furnish the Secretary of State with an Annual Report on the performance of its functions, and the Secretary of State shall have the duty to publish the report and to lay copies of the report before both Houses of Parliament.'.

Amendment No. 43, in page 2, line 45, at end insert—

`2C. The Corporation shall have the duty to satisfy itself, after consulting such bodies as appears to it to represent the interests of the public within the National Health Service, that the loans made pursuant to subsections 2A (c) and 2A (d) are available without discrimination in all areas of the country and to all medical practitioners in contract with a Family Practitioner Committee'.

Government amendment No. 29.

On a point of order, Mr. Speaker. Government amendments Nos. 16, 17, and 18, which are further down the batting order, concern a definition of "private patient" and certain aspects of rights of admission to hospital. I undertook in Committee to come back on Report with a Government amendment which met the aims of Opposition amendment No. 117, which was debated in Committee. I am now advised that the amendments that we put down do not achieve what amendment No. 117 sought to achieve, nor do they meet our aims.

With the leave of the House, therefore, I shall not move amendments Nos. 16, 17 and 18. I undertake, however, to put down amendments in another place which will achieve those aims and reflect the sentiments of our discussion in Committee. I apologise to the House for that.

I am sure that the House will be indebted to the hon. Lady for what she has said.

The principal effect of our clauses today is to enable the Government to reconstitute the General Practice Finance Corporation as a statutory company under the Companies Act 1985. Right hon. and hon. Members will know that private sector finance is now readily available for lending against all sorts of properties, including doctors' premises. Even with the existence of the GPFC, many doctors are turning to the private sector to meet their needs for financing practice accommodation.

With such funds readily available and rigorous competition among lenders, it makes sense to concentrate public resources on those things which only the public sector can do. We therefore intend that a major and reputable financial institution should be given the opportunity to acquire the GPFC and continue to administer it in the interests of doctors and patients and possibly other professionals, such as dentists.

As well as commanding the confidence of private sector investors, we wish to retain the interest and involvement of family doctors in the business. To this end, we are undertaking discussions with their representatives and with the corporation as to how best to achieve this.

We are also seeking powers to influence the content of the memorandum and articles of association so as to safeguard the main objectives of the present corporation through the successor body, and Government amendments Nos. 21 and 22 modify and clarify those powers.

In clause 3(3), as members of the Committee will know, we are increasing the corporation's borrowing powers to ensure that it remains actively in business pending the conclusion of the new arrangements that we propose.

The new clauses put down today are required to clarify the tax position, particularly during the transitional period between the old corporation and the successor company. Without new clause 14, there would be a substantial tax liability, which, of course, has never been our intention.

New clause 13 will avoid an unnecessary audit.

New clause 12 is needed to ensure Treasury powers to guarantee new borrowing—and existing borrowing—by the successor company as long as the body remains in public hands.

The Government amendments are also intended to render the changes consistent with other privatisations so that we can draw on successful experience in negotiations to come. It is on that basis that I move the new clause.

We are concerned that there has not been any consultation about the new clause which is now being brought in on Report. In particular, there has not been any consultation about the way in which the clause and the amendments would work with the General Practice Finance Corporation, from which I should have thought that the Government would want to seek advice in respect of such complicated and technical clauses.

The annual report of the GPFC has still not been published although it was submitted some time ago—[Interruption.] Perhaps the Minister is saying that it has been published. Indeed, we are glad of that at long last.

We are opposed to flogging off the GPFC. The new clause and the Government amendments do not alter the fundamental problem of clauses 1 to 3.

There is a need to improve primary care. Although GP services are a vital part of primary care, there are still some places where people have to travel too far to get to a GP's surgery. We need a strategic organisation that is publicly owned, such as the GPFC, to ensure that finance is available for setting up surgeries in areas where private capital might not otherwise be available to finance them.

We want the GPFC to be publicly owned, accountable and used as part of the Government's armoury to improve GPs' premises and to make them more accessible to disabled people. At present, many GPs' premises are not so accessible. We want the GPFC to invest public money in improving the services that are available at GPs' premises and to enable GPs to have new equipment, such as computers and new diagnostic equipment. That should be the role of a publicly owned and accountable body, which would be used by the Government strategically to improve primary care services.

In many cases, GPs' premises are currently not fit for the task that they are required to perform, let alone for the task that we should like to see them develop in the future, with increasing emphasis on the prevention of ill health and the promotion of good health.

The Government are planning to flog off the GPFC, with all its interests in GPs' premises, to the private sector. It could be bought up by a drug company or by an American commercial health care company. The Minister mentioned "reputable finance institutions", but there are no guarantees in either the clauses or the new clauses that there will be a reputable financial institution. We have no guarantee that financial interests in GPs' premises will not be bought up by drug companies or by American or other foreign-owned commercial health care companies. The Government are opting out of a strategic role in a vital part of our primary health care services.

The Government have not offered any criticism of the way in which the GPFC has worked in the past. There is only one justification for abolishing it. The Minister talked about reducing public spending. The GPFC does not involve public spending. It breaks even or makes a profit. It does count against the public sector borrowing requirement, but only to the tune of one thousandth of 1 per cent.

Therefore, we are against the new clause that would abolish the General Practice Finance Corporation. We are concerned that the Government have tabled the new clauses without any consultation. The new clauses do not deal with the main problems of clauses 1 to 3. Therefore, we cannot support them.

On the point about consultation, I am sure that if the hon. Member for Peckham (Ms. Harman) were to read the amendments which, as she rightly says, are quite technical, she would realise that some have been drawn up directly in response to comments made in Committee by herself and her hon. Friends. We are concerned to ensure that the Treasury guarantee should continue during the period of transition. That was one point that was raised. I am sure that if we consulted almost everybody about whether there should be a new tax liability, which we had not realised might exist, their response would be that we should go ahead in bringing forward the amendments, which we have done.

I am sorry that the hon. Lady has not seen the GPFC annual report. It was published on 29 March 1988, which is now more than a fortnight ago. I shall ensure that a spare copy is at the back of the Chair for her so that she can read it in her own good time. It is really quite interesting. Much of what the hon. Lady has said—[Interruption.] There is a copy in the Library.

The hon. Lady will know from the long discussions that we had in Committee that we agree about the conditions of some GPs' premises. Indeed, we are trying to extend the provisions to dentists' premises, as there is room for improvement. We share her concern about premises not being accessible to disabled people. We also share her concern that some GPs do not always help equip their premises as they should.

In the remarks that she has just made, and possibly in Committee, the hon. Lady has shown a degree of confusion in her mind between the role of the GPFC and that of family practitioner committees. It is the job of the family practitioner committee to do all of the things that she has said. It has the powers to do so and we expect it to use those powers. Indeed, it could go so far as to withhold payments for rent and rates from premises that are not suitable. The GPFC does not have the role that the hon. Lady has identified. I think that she wanted a strategic planning organisation, that is the family practitioner committee.

The new clause satisfied some of the points that were made to us in Committee. Therefore, we are endeavouring to ensure that the handover to the private sector is as smooth as possible.

Question put and agreed to.

Clause read a Second time, and added to the Bill.