Skip to main content

Nhs Trusts

Volume 175: debated on Wednesday 4 July 1990

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

3.40 pm

Yesterday I gave a full response to 32 questions about the establishment of national health service trusts. I said then that 199 national health service units had expressed interest in NHS trust status. These included single hospitals, groups of hospitals and non-hospital facilities. I understand that about 60 to 70 of those units which have expressed interest in trust status are likely to submit applications in the first wave for April 1991. I also explained that there would be three months of full public consultation on each application which will be undertaken by the relevant regional health authority. I stressed that, ultimately, my decision would be based on my assessment of whether, in the light of all relevant factors, NHS trust status for a particular unit will benefit national health service patients in that locality.

I do not propose to go over the ground that I covered yesterday in answer to hon. Members' questions. However, there are a few further points that I should like to make. First, I wish to state again, absolutely and categorically, that NHS trusts will, as their name makes clear, remain fully part of the national health service. Their staff will be national health service staff, their property will be national health service property, the bulk of their funds will come from contracts with health authorities, and the overwhelming majority of their patients will be NHS patients.

NHS trusts will be established by the Secretary of State. Their chairmen and a number of the non-executive members will be appointed by the Secretary of State. They will be accountable to the Secretary of State for the performance of their functions, and they can be dissolved by the Secretary of State.

I am glad to say that there is a great deal of interest in trust status within the national health service. Already in the few days since the Act received Royal Assent, we have received 12 applications. A further 25 or so units have informed my Department that they will be submitting early applications, and a substantially larger number expect to apply by 20 July. Twelve is the up-to-date figure at 3.15 when I left my office, but applications are coming in all the time. The first 12 applications are from Bradford acute services, Leeds general infirmary and associated hospitals, St. James's university hospital, Leeds, Central Middlesex hospital, North Middlesex hospital, Southend district services, Crewe acute services, the regional adult cardio-thoracic unit, Liverpool, Royal Liverpool children's hospital, East Gloucestershire district services, Mid-Surrey health authority general unit and the royal national orthopaedic hospital.

That first list includes major teaching hospitals, such as Leeds general infirmary and St. James's university hospital Leeds. St. James's is the largest teaching hospital in Europe. The Royal Liverpool children's hospital has an international reputation. Its application states that the promoters believe that
"local control and management is the most appropriate organisational model for the largest acute paediatric hospital and community child health services in Western Europe".
Clearly, all those applications and the others that arrive will need to be tested through the consultation process that we have set in place, and I shall want to look carefully at the proposals and the comments made on them before deciding whether to approve applications.

Finally, I re-emphasise the very real benefits that we see flowing from trust status. Trusts will be able to use the range of powers and freedoms which I have previously outlined for the benefit of patients, to improve above all the quality of service which they provide to our patients in our national health service.

The House will recall that yesterday the Secretary of State assured the House of the enthusiasm for his plans. If there is so much enthusiasm for his plans, why is he so afraid of letting local people decide for themselves whether their hospitals go self-governing? Why does he have to take that decision for them? Is not the real reason why the Secretary of State will not allow local people to ballot that he knows that he would lose?

May I press the Secretary of State on the interesting shift in the text overnight? Yesterday, the right hon. and learned Gentleman told the House that trust hospitals
"will be free to determine the terms and conditions of service of the staff they employ, to acquire, own and dispose of assets".—[Official Report, 3 July 1990; Vol. 175, c. 862–63.]
But today the Secretary of State told the House that their staff and property will belong to the national health service. Was he not right the first time? Why does not the right hon. and learned Gentleman admit that trusts will be able to hire and fire what staff they please, or to impose what conditions they please, and to buy and sell property for financial gain? Why does not he admit also that trusts will belong to the NHS only in the sense that at a late stage of the Bill's progress, he stuck "NHS" in front of their names?

Will the Secretary of State come clean on what he means by a process of consultation? Will he confirm that in an article in The Times on Monday, when he was asked whether he would let a trust go ahead "despite overwhelming opposition", the right hon. and learned Gentleman replied, "Yes"? If that is his intention, why not tell us that now and admit that the consultation is a fraud—the fake product of Ministers who love to lecture and hate to listen?

If the Secretary of State wants fair consultation, will he reveal who he will appoint as the chairs and directors of the trusts? [HON. MEMBERS: "Tories."] Before the public are consulted about the future of their hospitals, will they be told which industrialists or friends of the Tory party he is to put in charge of them? If the right hon. and learned Gentleman wants fair consultation, will he respond to the many doctors who have reported that they were put under pressure either by bribery or blackmail to agree to go self-governing as the price of development funding?

As the Minister who commended to the House the Rover deal, will the right hon. and learned Gentleman give an assurance that this time there will be no hidden sweeteners to go self-governing?

Is not the real reason why the Secretary of State cannot allow fair consultation that he cannot convince the public? Does not he understand that he can spent £3 million on the most expensive election address in history, but that he will not persuade the public that fragmenting the NHS will make it more efficient, or that turning their hospitals into business enterprises will make them more caring?

I warn the Secretary of State—[HON. MEMBERS: "Oh!"]—that if, after consultation, he goes ahead against the will of local people, ignores their views, and makes their hospitals self-governing against their wishes, they will vote for a Government who will listen to them, and who will take their hospitals back into their local NHS.

We are here considering the future of probably the most important public service in the country, and how best to raise the quality of care that it gives to its patients. The hon. Gentleman's roustabout, knockabout nonsense does not rise to the importance of the subject matter, which he reduced to almost ridiculous proportions.

The hon. Gentleman persists in arguing that the whole exercise should be reduced to ballots, to pursue what he described last week as his desire to have a by-election in every place where the staff of a hospital apply for NHS transfer status. No process of public consultation that I can recall on any important issue has been subjected to local referenda, of whatever electorate—certainly not by his Government or any other. Childish political ranting of the sort that we have just heard is no way to determine the future method of management of great hospitals such as St. James's hospital, Leeds, the Royal Liverpool children's hospital, or the others that I listed.

NHS trusts will employ national health service staff. They will be their own staff. Just as Nottingham district health authority, which is in the national health service, employs national health service staff, so if any hospitals become NHS trusts, they will employ their own staff as NHS staff. It is absurd for the hon. Gentleman to keep repeating that somehow their staff, property or premises will cease to be national health service staff, property or premises.

If the hon. Gentleman continues to deploy that sort of argument as his contribution to public consultation on such important matters, I can only believe that he is deliberately trying to alarm and deceive the staff who work in the hospital to get them to come to an opinion that is contrary to the facts. I do not want that sort of contribution from the hon. Gentleman or anyone else, although criticism of the proposals will be welcome if it is constructive.

We are seeking a serious process of local public consultation, during which those most affected can properly consider the proposals being put forward by the staff and managers of the hospitals, make comments on them and give their view about their probable effect on services. That will serve the purpose that public consultation is meant to serve, in all such ministerial decisions, by helping me to make a better informed decision that takes into account every serious proposition on the issue. The Labour party, which has no policies on health care, will use the whole process for rent-a-mob demonstrations, usually in the high streets of our towns, but occasionally on the Floor of the House.

Order. I appreciate the importance of the statement, but we have an important debate today on the arts. It is a rare opportunity to debate the arts. [Laughter.] I assure hon. Members that it is no laughing matter. So great has been the pressure to take part in the debate that I may have to impose a limit of 10 minutes on speeches. Therefore, I ask for single questions to the Secretary of State. If hon. Members inadvertently ask more than one question, I should be grateful if the Secretary of State would answer only the first.

I know that my right hon. and learned Friend is aware of the position that I sought to describe yesterday, but other colleagues will not be aware of how large the Trent-region is. It provides cardiac surgery to the north in Sheffield and cardiac surgery to the south in Leicester. Local medical and surgical opinion in Nottingham rightly sought to have that provision in Nottingham in the Queen's medical centre. Under local management, would that local decision be possible and not subject to an external veto?

I am grateful to my hon. Friend for waiting 24 hours for the answer to his question. More serious cardiac services are usually a regional specialty. Under the new arrangement the regions can continue to provide them as a regional specialty, and that includes deciding on the best location for them. However, where a hospital has opted for NHS trust status, one reason for doing so would have been because it wished to put forward its plans for the development of services in that hospital. Whether an NHS trust would be likely to proceed with the desire to develop cardiac services, as my hon. Friend has described, would depend on its ability to interest GPs and districts in providing the contracts for that service, if it was opened.

To that extent, taken with all the reforms the change will open the way to better, more local decisions, which are more influenced by the doctors, nurses and managers in great hospitals like the Queen's medical centre, which serves both our constituencies.

How can the Government justify their belief that when a private organisation such as a trade union takes action that could affect the public it should have a ballot, but that a public organisation which wishes to make a change in policy should not consult even when the public will be affected? Does not the right hon. and learned Gentleman realise that his statement today against extending people's right to have a say on this matter was the argument that his party has used every time that the House has considered an extension of the franchise?

With the greatest respect, that is a quite extraordinary analogy. A trade union that takes industrial action is asking its members—a definable group; a quite clear constituency—to break their contracts of employment with their employers. It was wrong ever to have had a position in which a member of a trade union could be subjected to the discipline of the trade union, sometimes in a closed shop, without being allowed any say before the action started on whether he or she wished to break his or her contractual relationship with the employer.

I see not the slightest resemblance between that process and the process of public consultation which Governments of all complexions regularly allow to take place on all kinds of complex, special interest subjects. It so happens that the management of the NHS is one of the more complex matters with which Ministers and the House must deal. There is no defined electorate that could cast a vote in a ballot because no one knows in which hospital he or she is likely to be a patient. There is no group that owns the hospital or knows that its members are bound to be patients of that hospital. The ballots for which the Opposition ask are part of the demonstration campaigning which they propose to lay on this summer. They know perfectly well that they would play no part in the decision-making of any political party which really believed that it would be in government.

In many respects, do not the new national health service hospital trusts correlate to the old hospital management committees and hospital boards? Is it not strange that the Opposition were content for the best part of 30 years to support the old structure but, for some peculiar reason, are not prepared to support the new one?

I agree with my hon. Friend. During the first 25 years of the health service, we had local management. To some extent, we are reversing the 1972 changes. This is particularly ironic for me, because I was in the House at that time. I was the Government Whip on the Committee that considered the Bill that created district health authorities. The then Labour party fought to the death to defend the old local arrangements against the bureaucracy which it said we were creating. Now that we are reducing that bureaucracy, the Labour party is defending it.

Everything come to he who waits, Mr. Speaker. How far will we be able to trust self-governing trusts? Will they be run on the same basis as trust ports? The Secretary of State for Transport is encouraging the use of private Bills to privatise trust ports. Will not similar patterns begin to emerge for self-governing hospital trusts, in that those who are trusted to run one may decide to run away from that trust because of pressure from the right hon. and learned Gentleman?

There is really no resemblance between NHS trusts and port trusts. I happen to think that privatising some of the trust ports is one of the best ways that one can find of improving their performance and the service that they give to industry. I have always been in favour of industrial privatisation. I am against the privatisation of the health service. I have always been against the privatisation of the health service and I will continue to be against it. The NHS trusts will be within the national health service, owning property that is NHS property, employing staff who are NHS staff and treating NHS patients who will not pay for the treatment. They bear no resemblance to the commercial world in which the port trusts work.

My right hon. and learned Friend will know that, to date, I have not managed to support his broad reforms, but I recognise that there is great merit in the concept of NHS trusts. Therefore, I read with particular concern the leaflet on NHS trusts, which stated:

"Those with an interest—staff, GPs, health authorities, community health councils and, above all, the local public—will be asked their views … and will have an opportunity to express an opinion".
Precisely how will that be done?

It will be done by the process of consultation over three months which I am asking regional health authorities to conduct. I shall ask them to publish the results of that consultation and come back to me with their comments so that I can make a better-informed decision.

I am grateful to my hon. Friend for reading that passage in my booklet. Like him, I would emphasise the "general public". The difficulty with public consultation is that it becomes dominated by overnight committees, various interest groups and trade unions—[HON. MEMBERS: "Ah."] Oh, yes. The Labour party is pouring the community charge into all kinds of front organisations which will respond to the consultations. The general public's interests are most affected by how well local hospitals are run for their benefit. I hope that in the middle of this political process, which the hon. Member for Livingston (Mr. Cook) is trying to stir up, the ordinary member of the public will give his or her views on what he or she would like from local hospitals.

Will the Minister tell the truth and say that opting out of hospital services is a small step to privatisation? Patients will have to pay for treatment or to stay in hospital, in the same way as the Government introduced charges for eye tests and dental services.

I always tell the truth, and I do not believe that the hon. Gentleman believes the proposition that lies behind his question.

Does my right hon. and learned Friend agree that the great national teaching hospitals—I am concerned with the royal national orthopaedic, the last on his list—are particularly suited to NHS trust status, provided that there is balanced local consultation and that the eventual structure is right and rational? Will he reassure opinion that that will be done properly, with careful thought, and that site and buildings ownership will be properly settled so that those hospitals will be assured of a viable long-term future—particularly, of course, the RNOH?

I am grateful to my hon. Friend. The last application that I received before leaving the office was a letter which states simply:

"The Staff of this hospital wish you to consider the Royal National Orthopaedic Hospital for National Health Service Trust status."

I am sure that the staff's opinion will be rejected by the hon. Gentleman if it does not coincide with his own.

The new bodies must be established carefully. Before any application is approved, we will ensure that the people appointed to the board are competent, that their plans have been well drawn up and considered and that they are likely to be successful in delivering them. The point of consultation is to ensure that there is no chance of an ill-thought-out application getting through and that the approved applications enhance the service to patients.

As the right-wing extremists in the Tory party fear the ballot box, will the Secretary of State spell out in some detail how consultation will take place? For example, if all the nurses at Broad Green and Alder Hey hospitals in Liverpool say, "No, we do not want this ideological dream of the Tory party", will he still go ahead and pursue these aims? Will he still say yes to hospital trusts? Does he agree that the only people who are pursuing these proposals with vigour are the petty bureaucrats whom he appoints, who are looking not to the interests of the patients but for knighthoods and peerages?

I will obey your injunction, Mr. Speaker, and answer only the first question. I do not answer for the right-wing extremists in the Conservative party. The hon. Gentleman should address that question elsewhere.

Will my right hon. and learned Friend confirm that the criterion by which he will reach judgments on applications is the quality of service that will be provided to patients? In the context of Leeds and the two applications from the great teaching hospitals, will he consider whether mergers of trust hospitals would be desirable and whether, as a consequence, rationalisation of district health authorities would be necessary?

I agree with my hon. Friend's premise that what matters is whether the change in status is likely to improve the quality of care to patients. In Leeds, it will be necessary to have a serious local discussion about the prospects of mergers of district health authorities, in which some are interested. Mergers of hospitals will not necessarily arise, but people wish to consider how the plans for both those great hospitals interrelate. The aim must be to set up a structure for managing and delivering the health service in Leeds that is likely to improve, to yet higher levels, the high standard of care in that city.

How can anyone have confidence in the Secretary of State promising local public consultation that will be worthy of that term when his track record in managing the health service shows that he imposed a contract on doctors, against the clear evidence of consultations with them, and shows the total lack of consultation with ambulance workers throughout months of a damaging dispute which cost millions of pounds? The evidence of those consultations, as he confirmed from the Dispatch Box this afternoon, will come from political appointees, who will be appointed by him to an extent unparalleled in the history of the health service.

I negotiated an agreement with the representatives of the GPs involving the stipulation for the first time of the services that GPs should provide to the public under the contract. I accept that that was later repudiated by the GPs, who said that they wanted the money without the description of services.

I did, indeed, resist the ambulance men's claim for a double-figure pay settlement and a high formula, because the health service could not afford it. The hon. Gentleman's test of democracy appears to be that people should be allowed to write their own contract of employment and specify the figure for their own pay. He says that it was undemocratic that I did not accept the GPs' and ambulance men's assertion of what they wanted. In both cases, I defended the public interest and, in the forthcoming consultation, I shall be bearing in mind the public interest—and not just special interests—in reaching my decision.

As the public have never been balloted on hospital closures, on the location of specific regional facilities or on internal reorganisation of facilities in hospitals, why should they be balloted now?

I agree with my hon. Friend. No Government of any political complexion have carried out a ballot on any decision in the health service since it was first created. The question of NHS trust status is one of the most complicated issues that has been put before the public during the lifetime of the NHS and it is particularly unsuitable for resolution by ballot.

The two teaching hospitals in Leeds provide a world-renowned service. They move at the frontiers of knowledge and during my 30 years in Leeds I have been surprised that provincial hospitals can be so good. What will happen now that the motive is a contract? How on earth will the hospitals be able to maintain university standards in conjunction with the university of Leeds given that the Government's proposals fly in the face of that aim?

After April next year, all the hospitals in the national health service, whether self-governing or directly managed, will enter into contracts for the services that they deliver. They will not be commercial contracts—

I advise the hon. Lady to read the White Paper, even at this late stage. There will be an agreement with the health authorities or the GPs, who will stipulate what services they want and what quality they require in exchange for an allotment of national health service resources to the hospital that will deliver those services. The separation of purchaser and provider has been welcomed by most people who have commented on the running of the health service. Even the Opposition are reported as saying that they accept the other way of describing the arrangements, which is that the money will follow the patient. I do not understand how the Opposition can have accepted the principle of what they have been describing for the past 12 months as the internal market but then continue their strident opposition to 1 he reforms that enshrine that concept.

Does my right hon. and learned Friend agree that the Opposition did not want the statement today—[HON. MEMBERS: "We asked for it."]—because they do not want the public to hear that there is genuine enthusiasm among all sectors of the service? [HON. MEMBERS: "Where?"] Those hon. Members who ask "Where?" should look at the ballot of consultants at the London hospital which came out in favour of self-governing status. Does my right hon. and learned Friend agree that Labour Members are interested only in trench warfare on behalf of their party political allies, the National Union of Public Employees and the Confederation of Health Service Employees?

I entirely agree with my hon. Friend. We continue to face strident demands for public consultation, which we have always said we want, from a party that will not even listen to the answers that we give to its alleged questions on the subject. My hon. Friend is also right to point out that numerous ballots of consultants have come out heavily in favour of NHS trust status. I do not rely too heavily on ballots because I am consistent in my argument that straightforward ballots of any group, however important, cannot in themselves determine one way or the other the future management of a hospital. There are plenty of hospitals where staff and consultants have voted in favour of an application.

I am sure that the right hon. and learned Gentleman will agree that there are those who want self-governing trusts, but some of them are concerned that officials will restrict their operations. The Secretary of State said that the trusts would be getting their contracts from health authorities. But will health authorities attempt to thwart such trusts and other hospitals that refuse to enter into contracts with them for particular services?

I agree with the hon. Gentleman. There are those in the service who are keenly in favour of local management of hospitals and NHS trust status. They constantly ask me to reassure them that they really will be given the local freedom to manage and develop hospitals as they wish. I keep giving them that assurance. They will be free from district health authority, regional health authority and Whitehall control of their day-to-day affairs. The contracts that we are describing will be entered into by every hospital and those contracts will be placed by the health authorities and by the patients on their assessment of the quality and value for money of the care that they are likely to receive under those contracts. Any other interference with self-governing hospitals' status and decision-taking will be ended by our reforms and they will be protected by the NHS trust documents that set them up.

Is my right hon. and learned Friend aware that many medical experts believe that this transfusion is just what the hospital service needs? Will he confirm that what he is now endeavouring to do, together with other health service measures, is to put the genuine public interest first over and above the partial and vested interests of some doctors, some bureaucrats and the Labour party?

I entirely agree with my hon. Friend. The longer the process of introducing the reforms continues, the more opinion is changing—which it is doing quite rapidly—within the service in the direction that my hon. Friend describes and for the reasons that he gave.

Is the Secretary of State aware that even tonight my local hospital, King's College, is considering a massive programme of cuts, ward closures, cancellations and bed closures? If the hospital was a trust, would not people like myself, my hon. Friend the Member for Peckham (Ms. Harman) and those who live in Dulwich and Bermondsey have the last vestige of democratic accountability removed from them because those cuts could be made without regard to local people?

No hospital will acquire trust status unless it can demonstrate that it is well managed, can achieve financial stability and has proposals for delivering the services that it wants within the resources that it is likely to get.

London health authorities, like all health authorities, face problems, but, like other authorities, they must deliver their services within the available resources. If London hospitals are allowed to disregard that, they will do so at the expense of other health authorities in the home counties from which the money would be drawn to cover the deficits. It is perfectly possible, as many London hospitals demonstrate, to deliver a good quality of service in acceptable quantities and stay within the generous allocations of funds that are nowadays made to the national health service.

With an aging population and the ever-increasing costs of the national health service do not we need a dynamic, progressive and efficient health service? If hospitals feel that by governing themselves they can deliver better patient care, why should they not be allowed to do that? Incidentally, it is not compulsory, it is optional.

I agree with my hon. Friend. Anyone who is seriously interested in the quality of health care wants it to be delivered by an efficient and well-run organisation. It is absurd to say that because something is a public service, it is wrong to look at efficiency, better decision-taking and the better use of resources and their delivery. The more important the service, the more important it is to get the right structure of management for it.

If the Secretary of State were to go into hospital for a serious operation, would he trust the doctors and nurses to have his life in their hands? If so, why does he not trust them to give their opinions about the national health service?

The answer to the first question is, of course, yes. On medical matters, I pay considerable regard to their opinions. However, I would not necessarily find totally compelling the opinion of a surgeon on what car to buy or on a subject that was outside his immediate professional expertise. The doctors and nurses work inside the service and management matters a great deal to them; it will have regard to their views. If health care policy had always been dominated by the expressed opinions of doctors in ballots, we would not have had the national health service in the first place because they voted by 9:1 against the contract that Nye Bevan originally offered to them in 1948.

Since the creation of NHS trusts will tend to increase the power of comsumers at the expense of that of producers, does my right hon. and learned Friend agree that only someone who was totally obsessed with protecting the power of trade union bosses and did not care a jot about how much he alarmed poor old patients would describe the matter in the terms used by the hon. Member for Livingston (Mr. Cook)?

I wholly agree with my hon. Friend. If there is one key to the changes that we are trying to make in public service to improve people's quality of life, it is that we want our public services to be dominated by the interests of consumers—in this case, patients—not by the interests of producers. The Labour party is an old-fashioned syndicalist party, completely dominated by trade union interests, and deeply resistant to change of any kind in the public sector.

May I advise the Secretary of State that St. James's hospital covers a large area of my constituency, and the constituents of Rothwell, who are served by the Leeds Eastern health authority, have made representations to the effect that they vigorously oppose the trust system for St. James's hospital? How will the consultation procedure apply to my constituents? Are not we witnessing an extension and a bigger stake of private hospital services in the national health service?

I would seriously ask the inhabitants of Rothwellto look at the applications being made by the people who work at St. James's hospital, to look at what they propose for the development of services, and to consider their arguments.

The application documents are public documents. We shall have a public consultation process. I trust that those who are promoting self-government for St. James's hospital will make sure that their case is available and is put across to the people of Rothwell. With respect, I do not think that the hon. Gentleman is doing any service to his constituents by turning round the proposals of local doctors as though local doctors are seriously suggesting turning the hospital into a private one. That is total nonsense and does not help the process of serious public consultation.

Does my right hon. and learned Friend agree that patients of the royal national orthopaedic hospital, for example, come from such a wide area of the country that the only conceivable ballot of those interested would have to be a general election? [HON. MEMBERS: "Hear, hear."] Does my right hon. and learned Friend believe that our winning the next general election will put an end to the spurious demands for inappropriate consultation?

My hon. Friend has made a valid point. It would be pointless to carry out a ballot of the residents of the immediate locality about the future of the royal national orthopaedic hospital, the Royal Liverpool children's hospital or quite a large number of hospitals that I have mentioned. The first point that was put forward by the proponents of the Royal Liverpool children's hospital is that

"it is inappropriate that a hospital providing services to the vast majority of DHAs in the North West of England and Wales is managed by only one DHA."
They go on to set out other reasons, too. That applies to quite a number of the applications that we already have. Again, it shows that the idea of reducing the matter to a simple local ballot is an attempt to reduce the issue to ward politics, which is what Opposition Members are doing, whereas we are interested in the future of the service. At the general election, people will want to judge which party is putting most effort into trying to keep up and improve the quality of our national health service.

How can the House take the Secretary of State's argument seriously when hon. Members have had lectures from him over the years about the need to make local councils more accountable and the need to make trade union officers more accountable through votes and political influence? It is now suggested that a major change in the national health service cannot be put to the consumers of whom he spoke so movingly because the Secretary of State does not know how to define them. How can he conduct serious consultations if he does not know who should vote, and how does he know whom to consult?

The point has just been answered extremely well by my hon. Friend the Member for Mid-Kent (Mr. Rowe). There is no definable electorate. No doubt that is only one of the reasons why no Government have suggested that local changes of this sort should be put to the views of the local electorate. If the Labour party has no views of its own on how to run the health service and says that the matter should be reduced to a yes/no referendum of the local population, it shows that it is in a desperate situation.

Southend-on-Sea has again given a lead to the country, with the support of its Members of Parliament, in being among the first 12 to apply. Does the Secretary of State accept that apart from the advantage of local management, the other advantage that we see, and which others should see, is that this is a way of escaping from the bureaucratic nightmare of being, for years and years, an underfunded district in an overfunded region? Will my right hon. and learned Friend explain that the proposals can help some areas, such as Southend?

For years, Southend has suffered from being a low-funded district in a well-funded region and has been badly affected by the RAWP system. I congratulate Southend district health authority on the quality of the care that it succeeds in providing with much lower resources than would be available to an equivalent population in most other parts of England. Other parts of the reforms will help Southend, such as the new system of allocating finance, to be introduced in April. That will put into the district health authority's hands the cost of providing care for its residents and will enable it to have more control over its use. Southend has shown that it wishes to get out of the present situation and to put to better advantage the good qualities of management and care that it has shown when facing its difficulties over recent years.

On the point about consultation, is the Secretary of State aware that today in Liverpool, while the area health authority is grappling with the problems of the pan-Liverpool plan for the NHS, four of his place henchmen have drawn up a secret agenda to start charging for breast cancer treatments for women under 50 years of age, and for treatments for people who are suffering from other complaints? Is he aware that they are selling off parts of Liverpool hospitals? Is he aware that those things are already on the agenda? Is he further aware that 1 he regional drugs unit in the city is underfunded, thus bringing on an epidemic of AIDS because of prostitutes and drug addicts? Who is telling the truth in all this? Is the Secretary of State telling the truth? Are the people of Liverpool lying? There is an agenda.

Area health authorities were abolished nine years ago. It will remain illegal to charge for national health service treatments.

Everybody is resistant to change—whether they are miners, trade unionists, workers in a town hall or lawyers. I do not like it when my wife tells me that I have to change. But national health service workers have to change just like everybody else. Does my right hon. and learned Friend agree that it seems particularly ironic that, having complained for years about interference from district health authorities, regional health authorities, the Department of Health and the Treasury, and having at last been given the opportunity to be masters of their own destiny, the trade unions are now whipping up the nurses, doctors and the like to oppose these changes, which should be very welcome to us all?

I agree entirely with my hon. Friend. We all understand that the prospect of change is deeply disturbing to everybody who works in a large organisation. That is bound to be the case and it is wholly understandable. It is the task of the leaders, the managers and the leading consultants in the hospital to manage that change in such a way as to address the legitimate fears of their staff, to reassure them, to help them to understand the new arrangements, and to seek to persuade them of the benefits of what they want to do. The only contribution from the labour and trade union movements to that is to go round spreading ridiculous fears among the staff and the public, to try to get them to make some instant decisions and to vote in the comic ballots that they keep saying that they want to organise.

Will the Secretary of State explain the consultation exercise a little further? For instance, will it be similar to the one currently taking place in Halifax about the proposed closure of three wards because of a £1.2 million deficit? Although that consultation period ends at the end of August, the management have already closed the wards. When I complained and said that the consultation period was not yet over and that they were breaking the procedures, the management said that they wanted to give staff their annual leave. Is that how it will be? Will it simply be a fraud that is perpetrated on those taking part?

The procedures that we follow are exactly the same as those followed by the previous Labour Government. Where a major change in service is proposed, there is a process of public consultation. If the community health council continues to disagree with the district health authority, the proposal is submitted to a Minister who makes a decision one way or the other. There has always been provision for emergency closures, but they eventually have to go through that process. The previous Government followed that practice, and we do. I have never heard any suggestion that it should be made subject to a ballot.

The fact that parts of the health service are still gripped by crisis management, causing frustrations with sudden closures of wards, shows the weakness of the present method of running it. Moving on to a proper basis of running it with local management being given more autonomy will eliminate much of the need for stop-go control.

Is my right hon. and learned Friend aware that the Northwich Victoria infirmary is one of the first three hospitals to apply for self-governing status and that that hospital is in my constituency? Like Southend, it is in an underfunded district in a region which is close to its RAWP target. Consequently, local flexibility should lead to more comprehensive and cost-effective provision of health care for everyone in my constituency and is greatly to be welcomed. The Opposition opposed local management of schools and are against the local management of hospitals. When they were in government, they trampled with hob-nailed boots over the electorate in the imposition of comprehensive schools. Why does my right hon. and learned Friend think that they are always against local management?

I have on the Table of the House the applications from my hon. Friend's constituents and others in Cheshire. I commend to the people of Cheshire the proposals from their local managers and doctors and ask them for their response. My hon. Friend is commending those proposals as likely to enhance the standard of care. The Labour party, as he rightly says, is against local control and prefers centralised command and bureaucracy because that is the preference of the trade unions that dominate all Labour party thinking on health service matters.

If the Secretary of State wants to improve the health service, he should resign. That would be the best tonic that I know for the health service. The Secretary of State has confirmed this afternoon that he is completely discarding the consultation process and basing his judgment or approval on the plans submitted by the applicants. If that is the case, why bother with consultation? If there are criteria to be met, why is the health service not meeting them today?

I said the precise opposite of that. I have announced that there will be a process of public consultation which I trust will enable me to take a better-informed decision. Before making any decision, I shall take into account all the representations put before me. If, as is very likely, there is an application from Doncaster, I shall wait to see what the people of Doncaster say before I reach a decision. The people of Doncaster are likely to make more sensible representations if they disregard the nonsense that the hon. Gentleman keeps putting out to the town about how the proposals are paving the way for privatisation and that they might have to pay for their care.

Is my right hon. and learned Friend aware that in the south-east the national pay and conditions that apply in the health service and the difficulties of disposing of surplus land stand in the way of improving the health service in my constituency? Does he agree that, far from the claims made by the hon. Member for Livingston (Mr. Cook), giving trust managers a greater say in pay and conditions and who they hire and fire is a good thing and that making it easier for them to dispose of surplus land is a plus? That is the way to achieve better services for our constituents.

I wholly agree with my hon. Friend about the desirability of local flexible pay in a giant and complicated service such as this. I do not think that the hon. Member for Livingston has ever run anything. Only on that basis could he possibly continue to argue that an inflexible national system of pay, terms and conditions for more than 1 million staff in every part of the country is a sensible way of running such a giant and important service.

Will the Secretary of State assure the House that he will not give the go-ahead to any opting-out proposals if the community health council—the local patients' voice in the national health service—is firmly opposed to that proposal? Will he assure the House that he does not propose to reduce the current powers of community health councils or to abolish them?

For 19 years, no one has given the community health councils an absolute power of veto over local decisions. I shall pay careful attention to the views of community health councils, and to everyone else, but I shall not put the management of the health service totally into the hands of the local community health councils. I certainly have no intention of changing the powers of the community health councils and, contrary to the wishes of some of my right hon. and hon. Friends, I have no intention of abolishing them. We left them out of the process of reform; they are one part of the health service that remains completely unchanged in composition, powers and duties.

My right hon. and learned Friend will have heard the hon. Member for Livingston (Mr. Cook), when opposing self-governing trusts, say that the only thing that the health service needs is more funding. Does he share my surprise, therefore, that the hon. Member for Derby, South (Mrs. Beckett) did not include any more money for the health service among the two definite commitments that she made on the subject? What credence can be given to the statement by the hon. Member for Livingston when the previous Labour Government cut the hospital building programme by 30 per cent. and cut nurses' wages, in real terms, in four out of their five years in office?

The hon. Gentleman is anxious to point out that he did not make it. He is not promising any more funding for the national health service. He has been prevented from promising any more money for the service in any sensible terms. The only money that he is going to spend is £90 million on restoring NHS sight tests, mainly for the benefit of the optical chains which have been lobbying for that. As far as I am aware, that is the only spending promise to which the Labour party remains committed.

The Secretary of State has continually referred to "a serious process of consultation", which he says will be undertaken. Who will pay for it? Will health authorities have to pay out of their current budget, or will they get additional money? What criteria will he use to assess whether the consultations are being conducted properly?

The cost of consultation—[Interruption.] The hon. Lady cannot hear what I am saying. The cost of consultation will come out of the costs of implementing the reforms, for which we have already accounted to the House. The criteria that I shall apply will be whether the proposals are likely to result in an improvement in the delivery of health care to national health service patients served by the unit in question.

Does my right hon. and learned Friend think that the attack levelled on his announcement today by the Opposition casts doubt on the integrity of the clinicians and managers who will run the NHS trusts—as if, by the very creation of trusts, those people will not be motivated to deliver extra patient care?

Yes, I think that many of the remarks made today are a direct attack on local managers and doctors who have spent a great deal of effort in putting forward these proposals. Many of the people who have put in such effort will be extremely annoyed to hear them reduced to that level by the Opposition, who claim that somehow they are all proposing to raffle off their hospitals or to charge patients. That is an insult to the local doctors who work in these great institutions and who have put plans forward.

Order. Because of the pressure of business I propose to move on to the ten minute Bill at 4.40. I hope that I shall be able to call all the hon. Members who wish to speak, provided that they are brief.

Will the Secretary of State reassure me that, in the event of trust status being granted to any hospital, and there being an excess of income over expenditure at the end of any financial year, that excess will be mandatorily reinvested in the hospital, and not put in the pockets of the trustees or their friends?

Yes, Sir. One of the powers of the new trusts will be to accumulate surpluses, but they will have to be used for the benefit of the trust. There is no question of trustees being paid any extra sums out of the surpluses, as the hon. Gentleman fears.

The Secretary of State will be aware that one hospital that has expressed an interest in opting out—although it is not on his list—is Bart's hospital in east London which serves my constituents in Hackney. It is the oldest hospital in London, founded specifically to care for the poor. Does the Secretary of State agree that it is precisely the poor who will suffer if Bart's opts out and balancing its books becomes its bottom line, because it would have to focus on high turnover and high income-generating specialties at the expense of the old and the chronically sick?

St. Bart's is one of our most famous hospitals. Nowadays it caters for all patients, regardless of their means, and it delivers a high standard of care. The hon. Lady's description of what NHS trust status means is frankly nonsense. I thought that we had moved some months ago from the argument that anyone in an NHS trust will have to concentrate on high-tech, high-profit lines. Most people who have studied the White Paper realise that that argument has nothing whatever to do with, and is a meaningless description of, the proposals that we have made: for trusts to stay within the national health service, to provide free treatment and to develop their services as the local managers, doctors and nurses would wish for the best.

Will the Secretary of State answer the one question that he has ducked all afternoon? Will he give a firm assurance that, if the consultation period results in clear decisions against the setting up of trusts on the part of those who have been consulted, he will adhere to those expressions of opposition; or does he intend to don his Thatcherite jackboots and stamp all over local opinion in his usual arrogant and high-handed fashion?

That is a bit rich, coming from an ex-chairman of the GLC. My approach to public consultation is indistinguishable from that of every Minister in any Government for as long as I have been in the House. The Minister retains the responsibility for the decision. Public consultation is to allow everyone to have their say, with the intention that the Minister shall eventually take a better-informed decision with the benefit of all the advice that he can get from people who have an interest. We have never handed over decisions to a mere counting of heads. I do not recall that the GLC did so either, except during the periodic intervals when—unfortunately—it succeeded in being re-elected.

I did not detect in the Secretary of State's statement any comment about the Government's policy on new hospitals. The Secretary of State is aware that a new hospital is being built in my constituency for which we have waited for more than 10 years. As yet we have no staff appointments—at any level—at that hospital. I fear that it may be the Government's policy to introduce a formula saying that such appointments will be conditional on the staff supporting opting-out, either formally or informally.

I well remember laying the foundation stone of the great new hospital in the middle of the hon. Gentleman's constituency. He arrived with a traditional demonstration carrying anti-poll-tax banners but discussing among themselves what the demonstration was about. In a field surrounding the hospital site, they concocted the extraordinary argument that it was a demonstration against the possibility that when the hospital was opened it might become a self-governing NHS trust. If that is his way of trying to take the gilt off the gingerbread of a huge investment in the local health service, I give the hon. Gentleman a prize for originality. The hospital will open in the ordinary way as an NHS hospital. It will be for the local staff—doctors, nurses and managers—to decide whether they wish to apply for NHS trust status.

Will the Secretary of State try to clear up the welter of confusion that he has caused among hon. Members? When he says that a hospital is applying to become a self-governing trust, and one of his colleagues behind him says that a hospital feels that it should apply, what are they talking about? Will the right hon. and learned Gentleman define "hospital"? Is it an animate object, or who in the hospital will do this? What kind of hypocrisy has gone on? Will the Secretary of State make that clear, as we genuinely do not know the answer?

I apologise to the hon. Gentleman: he is quite right. I disapprove of the habit of Opposition Members who, when they say that the nurses have said something, mean that COHSE has said it; similarly, when they say that the doctors have said something, they mean that the BMA has said it. I agree that I should not readily say that the hospital says something, but the names of the promoters are readily identifiable. The letters to me are signed. The would-be chairman is clearly identifiable, as will be the people putting forward local proposals. It will be for the local public to present their views for and against the propositions that the local managers, doctors, nurses and others wish to advance.

If the Secretary of State accepts that it is impossible to run a hospital without doctors, consultants, surgeons, nurses, cleaners, porters, secretarial staff and ancillary workers of all descriptions, will he explain why very small groups of politically motivated senior management are allowed to make applications to set up hospital trusts and, in effect, sell the livelihoods and jobs of those under them—and also damage their working conditions in the long term?

People who make such applications are motivated by a desire to be able to run their hospital units in the best possible way. I am sure that many people who promote those applications are not supporters of the Government or the Conservative party. It will be for the staff of the hospitals to put forward their views—as can everyone else—on the proposals. One thing must be made clear to the staff: they will remain national health service staff, with continuity of employment and their existing contracts. I hope that the hon. Gentleman will help me to make that clear to them.

Is the Secretary of State aware that two initial applications were made from Coventry for the Coventry and Warwickshire and the Walsgrave hospitals? According to the list that the Secretary of State gave this afternoon, both hospitals are not being proceeded with. The applications were made by appointed unit managers who did not consult a single doctor, nurse, ancillary worker or patient. Thousands of people in Coventry signed petitions against the initial applications and handed them to my hon. Friend the Member for Coventry, North-East (Mr. Hughes) and me. If formal applications are made, who will the Secretary of State consult—the staff, the patients or the unit managers who appear to want to be big fish in small ponds?

I shall consult all the groups that the hon. Gentleman mentioned. That is the whole point of the exercise. We have now received real applications from people who have described their plans. We propose to hold consultations on those applications with the general public and all the interest groups to which the hon. Gentleman referred. He has been running a daft campaign in Coventry, organising petitions against applications before they have been received and before he knows what they say. If the hon. Member for Livingston will allow us to move on to a more sensible basis for discussion, there will be a much more intelligent local consultation process about how best to improve the national health service.

Is the Secretary of State aware that he should be ashamed of himself for saying earlier that the crisis in the national health service is down to the nurses, the staff and all the other people who work in it? The real reason for the crisis in the NHS is the Secretary of State. People outside this place will be intrigued to know how the consultation is to take place. The nurses and staff will not have a vote. The general public and the consultants will not have a vote. How will the consultation take place? Does the Secretary of State intend to stare in the mirror? The general public will not like what it sees there.

I am reassured to hear that my appearance in the mirror will not solve anything; it worries me at times. As for the hon. Gentleman's other point, I did not say what he says I said, or anything like it. He must have had difficulty with hearing what I said because of the hooligan behaviour from time to time of some of those sitting around him.

May I repeat one question? If consultation establishes that a majority of the staff at a hospital and the majority of the public that the hospital serves are opposed to the hospital becoming self-governing, does he intend to listen only to those consultations that give him the answer that he wants?

I have described the process of public consultation. My description of it is indistinguishable from that which has been given by every Minister in any Government, of whatever political complexion. I trust that public consultation will help me to establish whether an application is well founded and in the interests of the health service and patients. The decision must be that of the Secretary of State for Health of the day. He is answerable to Parliament. If we ever had the misfortune of the hon. Gentleman occupying my position as Secretary of State for Health, I am sure that he would not get up and say, "I am going to stop running the service and will hand the whole thing over to local ballots." The hon. Gentleman reveals his inexperience and lack of ideas when he advocates such a procedure.