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Commons Chamber

Volume 404: debated on Wednesday 7 May 2003

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House Of Commons

Wednesday 7 May 2003

The House met at half-past Eleven o'clock


[MR. SPEAKER in the Chair]

Private Business

Transas Group Bill (By Order)

Order for Second Reading read.

To be read a Second time on Wednesday 14 May.

Oral Answers To Questions

International Development

The Secretary of State was asked—



What overseas aid projects she is supporting in Zimbabwe in 2003. [111516]


What plans she has to increase aid to Zimbabwe; and if she will make a statement.[111520]

In Zimbabwe, my Department has provided £51 million for humanitarian needs—mostly food, but also basic medical supplies in the past 18 months. We are also spending £26 million on an HIV/ AIDS programme over the five years to 2005. The humanitarian crisis in Zimbabwe cannot be resolved without political and economic change, but we must do all that we can to support its people until that change comes about.

I am grateful to the Secretary of State for that rational and full reply, and I commend her for the work that she is doing in Zimbabwe in trying to reduce the chaos and tragedy of Mr. Mugabe's Government. Does she accept the view expressed yesterday in the House by the Foreign Secretary, who said that Zimbabwe is now affecting regional security? Does she not therefore believe that we should internationalise the problems of that country and that the United Nations should become more involved so that we can get people from other countries on the ground to realise the chaos and catastrophe of Mr. Mugabe? The sooner he can be got rid of by his own people, the better for them.

I certainly agree with the latter sentiment. Things seem to be mounting up. The mass stay-aways have been big and the pressure from Africa seems stronger. The disaster is terrible in terms of the destruction of the economy, thuggery, hunger and suffering. My instinct is that the end is coming and that the forces are mounting, but it cannot happen too soon.

On the effects on security in the region, many people are moving out of the country and the crisis affects the region's economy very severely. The drought is less bad in neighbouring countries, so the humanitarian crisis is also less bad there, although it is serious in Zimbabwe. The UN has been involved, especially in the humanitarian crisis.

We need new tools in the international system. When dictators destroy their countries, we do not have the tools to deal with them. I hope that when the International Criminal Court is set up, we can start indicting and arresting some of those individuals, instead of having to wait for the country to fall apart before the international community can act.

Have there been any meetings of the Commonwealth's financial action taskforce, which deals with laundered money? Zimbabwe is a member of the taskforce and we have observer status.

I do not know whether that taskforce has held a meeting, but I shall certainly find out and let my hon. Friend know. As I should have told the hon. Member for Macclesfield (Sir Nicholas Winterton), the Commonwealth has also been actively involved, so there is international engagement, but the process is taking longer than we would all like.

Does the right hon. Lady not agree that it is grotesque that this tyrant, who is depriving his people of their lives and his country of its prosperity, should still carry a high British honour? Will she advocate its immediate removal?

I agree with the hon. Gentleman's depiction of President Mugabe. The suffering and destruction that he has brought upon his people—a wealthy nation and an educated people—are unbearable. I am not an expert in honours, but I shall convey his view to the appropriate authorities.

What planning is my right hon. Friend's Department doing? While Mugabe is still in charge in Zimbabwe, the crisis will obviously continue. Until normal relations are restored in the country, there will be no proper planting or food production. Has she given any thought to how many years this crisis will continue?

I am afraid that I cannot predict exactly when tyrants will fall. We all know when it is coming. When Milosevic fell, it went on for longer than we would have hoped but we knew that it was coming. In the meantime, we must plan flexibly against nature, which is why assessments are being made of the current harvest. That makes a difference, but it is not enough, because the fundamental wreckage of the economy is political rather than a result of the drought.

We must also plan for flexibility. As soon as there is some sort of legitimate Government with whom the international community can work—I hope that a Government of national unity will start the reform process—the whole international community will be able to engage and help the people of Zimbabwe to start rebuilding.

I am sorry that the House will have to put up with a solo act, as my hon. Friend the Member for Salisbury (Mr. Key) is with his Select Committee in Washington this week.

The Secretary of State said that pressure from Africa was getting stronger, but despite the fact that a high-level delegation of African leaders went to meet President Mugabe behind closed doors on Monday, there has been no apparent progress. What measures is her Department taking to buttress the efforts of the Movement for Democratic Change to bring an end to state-sponsored violence? Does she share the MDC's view that regional powers are shielding Mugabe from international censure?

I agree with all who have said that pressure from African neighbours and from African countries generally has been very disappointing, but that is partly because Mugabe was such a hero, especially in southern Africa, for his stand against the Ian Smith regime with people who were living under apartheid. His reputation was such that people were unwilling to believe the truth of what he was doing to his country. He also confused Africa by claiming that the issue was all about white farmers with excessive land; and there was indeed a case for stronger land redistribution. Consequently, pressure from Africa has been much less than it should have been. The voices are getting stronger and the pressure is getting greater, although it remains behind closed doors.

As the hon. Lady knows, we are an international development agency. We support the efforts of the Foreign Office to bring pressure to bear throughout the system on state-sponsored violence, but we make no conditions in terms of feeding those who are to be fed—humanitarian aid cannot be used for political purposes.

Surely we can do more to put pressure on the international community to ensure that Mugabe does eventually go. What are we doing to ensure that people in Zimbabwe know that there is a better life in front of them when Mugabe has gone?

I do not honestly think that we can do more: everything that can be done in the international community has been done. That action has been led by my right hon. Friends the Foreign Secretary and the Prime Minister, and I have joined in whenever I can. The frustrating aspect of situations where dictators are wrecking their countries is that the tools that the international community can bring to bear are limited. The people of Zimbabwe have no doubt about how terrible the situation is there is cruelty and dictatorship. Their power to bring about change is limited, but they are struggling to do so, despite the intimidation, as the results of the recent by-elections showed.



If she will make a statement on aid being provided to Afghanistan. [111517]

At the Tokyo conference on Afghanistan in January 2002, donors pledged $4.5 billion over one to five years for the reconstruction of Afghanistan. Last year, more than $1.8 billion was disbursed, and another $1.8 billion will be provided this year. It is widely suggested that Afghanistan has not had the resources that were promised. That is not true, but one of the problems is that because the authority of the Government in Kabul does not extend right across the country, some resources are flowing through the UN and other agencies. Getting security and order across Afghanistan is essential in moving on to further development.

My friends in the area tell me that following the magnificent crusade to establish liberty and democracy in Afghanistan, the only optimism is in the heroin industry, which has been freed of the Taliban restrictions. Can the Secretary of State say how she is endeavouring to circulate aid in a country which, outside Kabul, seems to be run by warlords and mini-dictators? I do not in any way blame her for that, but is there an answer?

There have been improvements in the lives of the people of Afghanistan. More children are in school, people have been fed, and the drought is coming to an end, which is a blessed relief. The UN system kept up the feeding right through the crisis and has done so ever since. Many children have been immunised. However, I absolutely agree with the hon. Gentleman's fundamental point. The whole economy is based on narcotics, and it is run outside Kabul by warlords, who were strengthened during the conflict. People have been fed, the basics have been improved, and Kabul is safe and secure, but we now need to build a national army, to demobilise the warlords' fighters, and to assert the Government's authority across the territory.

Provincial reconstruction teams are being put in place in the big cities; my right hon. Friend the Defence Secretary is to make an announcement about the UK's contribution to that. We must secure authority across the country and disarm the warlords; otherwise, the narcotics industry will continue to flourish.

The House will understand that despite the dreadful problems with warlords, drug barons and so on, good progress has been achieved by working with UNICEF and others to deliver humanitarian aid and to develop and encourage education, especially for girls. Does my right hon. Friend agree that that progress can continue?

My right hon. Friend is right. The fact that an enormous amount remains to be done should not deter us from congratulating the international system on the progress that has been achieved. The lives of people in Afghanistan are better. For example, many children are back in school; many women are back teaching; a Loya Jirga has taken place; work is progressing on a new constitution; and many children have been immunised. Further improvement depends on progress on order, building a national army and disarming the warlords. Progress on tackling the narcotics trade also depends on that. We have reached a point where there must be order outside Kabul or we will not move much further.

The right hon. Lady will remember her words to the Select Committee on International Development in December:

"Security is now coming outside Kabul, the international community is not going away, American power is not going away. The government will be strengthened, there will be a national army."
We have already heard that that has not happened and that the position is worse. When will there be adequate security in Afghanistan to allow progress on reconstruction and public services? When will asylum seekers be able to return willingly and without compulsion? Will Iraq suffer the same fate as Afghanistan, or will the presence of oil make the difference?

Afghanistan is not worse, as I made clear. If the hon. Lady reads the briefings, the details make that clear: people are being fed, children are in school and being immunised and people are back at work. The position is not worse, but the country was wrecked by 20 years of warfare. It is desperately poor—one of the poorest countries in the world. [Interruption.] It is no good the hon. Lady sighing; rebuilding a wrecked country takes time and a lot of effort.

Agreement has now been achieved. It has taken longer than I would have liked, and the United Kingdom has played a part in applying pressure for the formation of a national army. There are many powerful vested interests in the warlords, and some of their power is influential in the country's Ministry of Defence. Agreement must be followed by demobilising many fighters. The process is beginning to progress, as are the provincial reconstruction teams. However, the country will not move forward without persistent engagement and we need to drive forward on security outside Kabul in the next months and years.

Can the Secretary of State confirm that, as part of continuing security operations in Afghanistan, some coalition troops are conducting operations in civilian clothing while armed, and claiming to be humanitarian workers? Does she accept that British aid workers' lives are being put at risk by the blurring of the distinction between aid workers and soldiers? What is she doing to raise that with the Secretary of State for Defence and members of the US Administration?

I am not aware of that serious allegation of a complete breach of the Geneva convention. If it is true, it would endanger the work of humanitarian workers; indeed, a worker from the International Committee of the Red Cross died near Kandahar I believe, speaking from memory. I have heard nothing about such an allegation; I shall look into it and get back to the hon. Lady.

Southern Africa


If she will make a statement on the relief of poverty in southern Africa. [111518]

The Parliamentary Under-Secretary of State for International Development
(Ms Sally Keeble)

The 14 countries of southern Africa contain some 200 million people, of whom approximately 40 per cent. live on less than $1 a day. The region is heavily affected by HIV/AIDS, and has also suffered a food crisis. In the past year, my Department spent £260 million to support poverty reduction in those countries.

Has my hon. Friend noted the conclusion of the Select Committee on International Development report on southern Africa? It states that Africa is the only continent that is moving backwards on attaining the millennium development goals for relieving poverty. Does she agree that some of the major challenges in southern Africa are the health crisis caused by AIDS, the underdevelopment of agriculture, and the political regimes of countries such as Malawi and especially Zimbabwe? Those countries could be a solution to the problem in southern Africa rather than a major cause. How are the Government working with the international community to tackle those challenges?

My hon. Friend is right about Africa's problems, especially the fact that the region will not generally reach the millennium development goals, although the performance on some is worse than on others.

The hon. Gentleman is also right to identify governance and HIV/AIDS as two of the main barriers to development. The United Kingdom Government have been in the lead in tackling those problems, and in working internationally to do so—through the G8 Africa plan and also through our support for the New Partnership for African Development. Most important are our proposals for an international financing facility to raise the extra funds needed to achieve the MDGs both in Africa and elsewhere.

Can the Minister confirm that the southern African country in which poverty has increased most is Zimbabwe, owing to the disgraceful behaviour of its illegal Government? The Secretary of State mentioned the welcome aid money that would be sent to Zimbabwe for food. Is the Minister entirely satisfied that that food is getting through to all people in Zimbabwe, not just—as is alleged—to Government supporters?

I am not sure whether Zimbabwe is the country in which poverty is increasing fastest, but the right hon. Gentleman is right to point out that a once strong economy has collapsed. Inflation is rampant, and I believe that growth is now negative. The right hon. Gentleman is also right in thinking—I suspect—that whenever the Government in Zimbabwe change, rebuilding the economy will take many years, and people will suffer for a long time as a result of the damage to the economy.

There are stringent safeguards to ensure that food sent through the international community is not used for political purposes. As well as food, we give Zimbabwe about £15.3 million of other aid, and do a substantial amount to tackle HIV/AIDS.

The Department has persuasively linked conflict and poverty. Does the Minister agree that a resolution of the conflict in the Democratic Republic of Congo would significantly reduce poverty in southern Africa? What measures will the Government take to secure peace in a conflict in which more than 3 million have died?

My hon. Friend is right about the impact of conflict on a country's economic performance. About one fifth of people in Africa are affected by conflict, and it costs the continent about 2 per cent. a year in economic growth. The elimination of poverty is therefore a major problem. My hon. Friend is also right to pinpoint the DRC as one of the areas in which the problem is most acute.

As my hon. Friend will know, we are supporting the introduction of a transitional Government. We have also supported the UN observers in the area, and we look forward to the arrival of Bangladeshi troops in, I think, June. We will support the peace process as a key part of our ethical conduct policy.

It is common ground that the HIPC—heavily indebted poorest countries initiative is failing to meet expectations, even in countries where in some respects it has been completed. What is the Department doing to tackle the greatest deterrent to increasing trade in poor countries and relieving poverty? I refer to the collapse of the commodity prices on which those countries' trade depends so much.

Order. There is far too much noise in the Chamber. It is difficult to hear either the questions or the answers.

I do not agree that the HIPC initiative has failed. It has provided substantial relief for a number of countries. There is unsustainable debt in some countries that have completed the initiatives, but we are considering ways of tackling that.

The hon. Gentleman is of course right about the need to support trade. My right hon. Friend the Secretary of State and other Ministers throughout Government have been extremely supportive of the Doha agenda which will secure the reforms that are needed to increase trade. That, ultimately, is where the solution will lie.



If she will make a statement on the humanitarian situation in Iraq. [111519]

The humanitarian situation in Iraq is improving, but there are still serious challenges. Progress has now been made in restoring water, power and health services in many areas. Order is being restored, but it is still a significant problem. The World Food Programme is building up supplies of food and working to reinstate the distribution system of the oil for-food programme. Sixteen million people depend on that, and they might start running out of food in the middle of this month. Getting salaries paid so that health, education and police services can be reestablished is also an urgent priority.

I congratulate my right hon. Friend and her Department on the excellent efforts that they are making in relation to humanitarian aid, under difficult circumstances. Does she have any information that she can share with the House today on UN plans to establish a permanent set-up in Iraq?

I am very pleased to be able to tell my hon. Friend that the UN has now returned to the north, with, I think, 90 international staff. Local staff are also in the region. In addition, we have 21 international staff in Baghdad, and we have 50 staff in the south. We will shortly be taking over responsibility for co-ordinating humanitarian efforts from the US Office of Reconstruction and Humanitarian Assistance. It is very important and good news that the UN is back in Iraq, and matters should move forward from that.

What precise efforts are being made to clear up the cluster bombs used in Iraq?

The hon. Gentleman draws attention to a very important question. There are reports of lots of serious accidents, and of lots of children losing limbs and being injured by explosions from unexploded ordnance. The UN is trying to map the locations of such ordnance in the country and to give priority to beginning the removal process, starting with the most dangerous areas. The return of the UN should speed up that work. However, the situation is very urgent, and we must do better.

Is my right hon. Friend aware of the number of Iraqi reconstruction groups being set up in Britain, primarily by Iraqi exiles in this country? Is her Department in a position to help those organisations in any way? Does my right hon. Friend know when telecommunications with Iraq will be re-established, so that those groups will be able to contact their families and others, and help in the reconstruction programme?

I am aware that there are a lot of such groups. I also know that my hon. Friend has one in his constituency, and he has been in touch with me about it. We urgently need agreement in the UN Security Council to bring into being an internationally recognised interim Government in Iraq. We will then get the International Monetary Fund, the World Bank and the Asian Development Bank involved, and real reconstruction can begin. I am sure that all the groups to which my hon. Friend refers can bring lots of skills and ability to the reconstruction of their country. The failure to get political agreement is slowing that process. We must all work to try and get the international community to unite, as my right hon. Friend the Foreign Secretary its doing.

Similarly with telecommunications: major reconstruction depends on the sort of political progress that I have described. I suggest that any individuals unable to get in touch with their families should contact the Red Cross, whose staff can usually find out how people are, and where they are.

Does the Secretary of State agree that it is important that representatives of Iraq should be encouraged to take part in all international events? Will she lend her support and encouragement to our Government to facilitate the travel of the Iraqi special Olympics team, so that they can come and compete in the international special Olympics event being held in Dublin in June?

I certainly agree that we should do all we can to get Iraqi people engaged in such events. It is a matter of urgency that they take up their rightful place, in their own country and in the international system. I have no personal information about the special Olympics team. Does that involve people with disabilities?

I should be grateful for any information that the hon. Gentleman can give me on the subject, and I shall certainly do what I can to facilitate matters.

I have just returned this morning from a visit, with the British Limbless Association—(Interruption.]

I was visiting Kuwait to see the Iraqi children who had been evacuated there as a result of their injuries. The children are receiving excellent treatment from the doctors in Kuwait, but I am all too aware that they are just the tip of the iceberg. An unknown number of Iraqi children have no chance of getting such treatment. Will the Secretary of State make a commitment to establish, as part of the reconstruction of Iraq, a centre dedicated to the treatment and rehabilitation of other victims, so that they can lead the independent lives that they want?

There is no doubt that the reconstruction in Iraq is about rebuilding lives and I share the hon. Lady's commitment to that. I have discussed the issue at length with Jacob Kellenberger, president of the International Red Cross, which takes the view that the level of skills and the talented doctors in Iraq mean that, by and large, children do not need to be brought out of the country. We need to get the Iraqi systems up and running and reinforce them. If children cannot be treated there, they should be kept in the broader region, if possible. We must take the advice of those who are working in the country. I accept the hon. Lady's objective to help Iraqi children and reconstruct their lives, and we should organise in the best possible way to achieve that.

Prime Minister

The Prime Minister was asked—


Ql. [111502]

If he will list his official engagements for Wednesday 7 May.

This morning I met the Australian Prime Minister, John Howard. I know that the whole House will want to welcome him to the Palace of Westminster today, and I am delighted to pay tribute to the brilliant contribution made by Australian forces alongside British and American troops in securing the liberation of Iraq—[HON. MEMBERS: "Hear, hear."] After that moment of consensus, in addition to my duties in the House I will have further meetings with ministerial colleagues and others later today.

But does my right hon. Friend agree that no industry underpins our manufacturing more than the steel industry—particularly the special engineering steel that constitutes 80 per cent. of our exports of aerospace steel? That industry is based in my constituency and I believe that it may be at risk from the announcement made by Corus last Tuesday. Will my right hon. Friend not ask, but insist, that the new management and leadership at Corus work in partnership with the Government and with the representatives of the work force to ensure a proper, viable potential plan for steel in this country that builds on new markets and does not squander opportunities?

My hon. Friend is right in saying that it is important to work in partnership with the company, the unions and, indeed, our Dutch counterparts. That is exactly what my right hon. Friend the Secretary of State for Trade and Industry is doing. I also welcome the Select Committee on Trade and Industry inquiry into the future of the steel industry, which starts today. For any people who lose their jobs, we will put in place every possible measure to ensure that they find fresh jobs and acquire the training and skills necessary to get them.

I join the Prime Minister in welcoming the Australian Prime Minister to the House: he is a true ally of this country.

However, with hundreds of schools budgeting for deficits and threatening to sack teachers, will the Prime Minister tell the House whether his education department passed on all the available money to schools last year?

The Department for Education and Skills has passed on a record increase—some where in the region of 12 per cent. in cash terms. The Department has just published an analysis of what local education authorities have and have not passed on. The 12 per cent. cash terms increase that we are giving to education stands in stark contrast to the 20 per cent. across-the-board cuts in education spending that the right hon. Gentleman wants to see.

The Prime Minister failed to answer the question. The Department for Education and Skills held back £1 billion from schools last year. Last Friday, the Prime Minister had the cheek to blame councils for underspending. After five Labour education Bills, three Labour Secretaries of State for education and all the moneys raised in taxes, schools are in deficit and teachers now face the sack up and down the country. Turning to the health service, will the Prime Minister tell us whether there are more bureaucrats or beds in the NHS today?

First, on education, we are putting about £2.5 billion extra into education. May I remind the right hon. Gentleman that there are now more teachers in our education service, more classroom assistants and support staff and more capital investment going into schools, which, again, stands in contrast to his commitment to cut that spending?

As for the national health service, what he says on beds and bureaucrats is complete nonsense.

According to the Prime Minister's own Department's figures, there are now more bureaucrats than beds. After the fifth reorganisation of the health service in six years, hospital admissions are now falling, treatments are flat, and a record number of people now have to seek treatment outside the NHS.

Turning to crime, will the right hon. Gentleman tell us whether violent crime is rising or falling?

I can see why the right hon. Gentleman wants to leave these subjects pretty quickly, given the answers that he gets. I will deal first with the national health service: he made some comments and I think they should be answered. Let me point out to him what the extra investment has bought: 750,000 more elective admissions since 1997; a 37 per cent. rise in heart operations; a 56 per cent. rise in cataract operations; 1.4 million more out-patient appointments a year; 96 per cent. of people who are diagnosed with cancer seeing a specialist within two weeks; and 50,000 extra nurses. Let that stand in contrast to a rise of 400,000 in waiting lists under the Conservatives.

As for crime, it has fallen, not risen, under this Government.

The Prime Minister's own Department's records show that violent crime is up by 20 per cent. in the last year alone, and gun crime under this Government has doubled. The Prime Minister therefore failed to answer that question, too. The point is that he has had 14 criminal justice Bills and a £5 billion increase in the Home Office budget, against which that failure stands in stark contrast.

On transport, can the Prime Minister tell us whether traffic congestion has risen or fallen under his Government?

First, let us deal with crime. We should carry this exchange forward, and I look forward to talking to the right hon. Gentleman in a moment about mortgage rates, jobs, inflation and several other things. In relation to crime, it is correct that violent crime has been going up for around 15 years. Overall, however, crime has fallen, not risen, under this Government. As the right hon. Gentleman talks about stark contrast, I will give him the stark contrast: under this Government, crime has fallen, whereas under the Conservatives, it doubled. That is the stark contrast. Incidentally, I thank him for the opportunity of pointing out that we have more police officers today than we have ever had. As for transport congestion, it is true that that has risen.

The Prime Minister knows that six years ago his Government promised an integrated transport strategy and his own deputy pledged to get people out of their cars. There has been a rise of 7 per cent., however, and the reality is that a quarter of trains now do not run on time. Given that record of failure, will the Prime Minister tell the whole House how much extra he plans to take from taxpayers this year?

First, in relation to the tax burden, it has fallen in the last year. It is absolutely correct that the national insurance rise has been introduced this year to pay for a massive increase in national health service funding. If the right hon. Gentleman does not support that rise, let him tell us how he intends to match the extra investment going into the health service.

It has not just risen—this year alone, it will rise by £26 billion. After six years of Labour Government, the tax burden is up for every household by £5,500—an increase. In return, taxpayers have received teacher redundancies, falling hospital admissions, more violent crime and a transport system in chaos. For all the Prime Minister's talk of reform in the public services, is it not the case that after six years of Labour Government all we have is more tax, more waste and more failure?

Let us look at the results. In respect of schools, we have the best primary school results the country has ever seen. We have the best GCSE results the country has ever seen. We have the largest hospital building programme under way since the beginning of the 1948 NHS. Never mind that the right hon. Gentleman talks about more bureaucrats, we have more nurses in our health service. Every waiting list and waiting time, nationally, is in a better position than in 1997; and crime is down, not up.

I am delighted that the right hon. Gentleman mentioned the economy. I shall mention it for him, too. In respect of the economy. we have the lowest mortgages for 40 years; we have the lowest unemployment for 30 years; we have the lowest inflation for 30 years; and we have the highest employment ever. That is the difference between Labour and Tory.

Q2. [111503]

My constituents are seeing genuine improvements in the quality of their health service locally: Northwick Park hospital, which serves my constituents, is in the top 10 according to The Sunday Times good hospital guide and a £15 million investment programme in maternity services is due to start shortly. However, there is real concern locally about the possible move of the regional cancer centre from Mount Vernon hospital, which also serves my constituents, because of the possible break-up of the excellent clinical team that operates from the hospital. If the proposal should survive and land on Ministers' desks, can my right hon. Friend assure me that, before they take a decision, the appropriate Minister will meet me and a delegation of my constituents?

I am sure that a Minister will do so if it comes to the point that my hon. Friend describes. My understanding is that those proposals have been put forward by the strategic health authority; they are now under consultation not only by local clinicians but by local people. My hon. Friend is absolutely right to say that overall there has been a substantial increase in investment in cancer care, and that has yielded significant results for cancer treatment in this country. I am sure that there will be all sorts of local debates about the best way to configure that provision and I assure my hon. Friend that, before any decisions are taken, his representations will be taken fully into account.

Returning to the earlier exchanges, the only thing that seemed to be missing from the comments of the leader of the Conservative party was that his cat had died under a Labour Government.

The genuine case for local decision making, decentralisation and reform within the health service is valid, but the proposal for foundation hospitals will inevitably create two-tierism in our national health service. What does the Prime Minister have to say to the staff and patients who will find themselves left behind?

I would simply say that the best answer is that given by health service professionals and workers in the health service, who support the idea of greater devolution and also the idea that it should be on an earned basis, so that we ensure, before the extra freedoms and powers are given, that those hospitals are at the highest possible standard. We are then putting a substantial sum of money into other hospitals in order to raise them to the same standard. It is completely absurd for the right hon. Gentleman to say that he is in favour of local devolution and then to oppose the very proposals that give it.

The Prime Minister is focusing on the issue of foundation hospitals, but he must reflect on the fact that he has a set a target for 2004 that will involve 3,000 fewer hospital beds than when he came into office six years ago. How does he explain that away to the British people?

We are actually increasing the number of hospital beds at present. It is true that they were declining for a long period. Sometimes, that could be for good reason: people could decide to carry out day care cases rather than have patients stay overnight in hospital. At the moment, however, we are increasing the number of beds in the hospital service. It is absolutely right to say that, as a result of the additional investment that we are putting in—the largest-ever investment in the health service—we shall be increasing the number of staff working in the health service, the number of beds, the number of GP premises, the number of hospital refurbishments and, indeed, of entirely new hospitals. The important thing is to ensure that, at the same time as we are making that massive investment in the health service, the public see real reform taking place, because that is the basis on which they are prepared to support funding the health service.

Perhaps my right hon. Friend has not yet had time to study last week's results of the elections to the Scottish Parliament. Is he aware that the election of list members under a complicated system of proportional representation has had a bizarre outcome, to say the least? Will he therefore guarantee that he will never introduce any form of PR for elections to this Westminster Parliament?

I have no doubt that there will be an ongoing debate on this subject, and I can assure my hon. Friend that I will listen very carefully to it.

Q3. [111504]

Does the Prime Minister recall that in written answers to me and in an oral answer to the hon. Member for Thurrock (Andrew Mackinlay) last week. he confirmed that he adheres to the Wilson doctrine relating to the telephone tapping of Members? When that doctrine was outlined on 17 November 1966 to one of my predecessors as MP for Lewes, Sir Tufton Beamish, it was indicated that there would be "no tapping whatsoever", and that if there were to be a change of policy, the then Prime Minister would make a statement to the House.

It now seems that at least one MP has been subject to telephone tapping, yet no statement has been made. Will the Prime Minister therefore state quite categorically whether any Member of Parliament has been subject to telephone tapping since 1997? This is an important constitutional matter and needs a straight answer; indeed, the Wilson doctrine requires that he give it. Will he do so now?

I am sorry to disappoint the hon. Gentleman but I have nothing to add to the answer that I gave last week.

Q4. [111505]

Will the Prime Minister join me in congratulating the Attorney-General on his successful appeal against lenient sentences for the notorious Pitt Bull Crew, a drugs and gun gang in Manchester that is responsible for murder and violence? Does he also agree that if we are to defeat the gun gangs in our cities, we must not only offer ways out of the gun and gang culture for those young men who want to get out, but ensure that the courts hand down sentences that are warranted for those involved in murder, extreme violence and witness intimidation?

First, I pay tribute to the work that my hon. Friend has done in Manchester in respect of this issue. I know that it has troubled many of his constituents over a number of years, and he has played a significant part in shaping the Government's proposals in this area. Obviously, I support strongly what the Home Secretary said in relation to sentencing principles earlier today. In respect of gun crime, too, my hon. Friend will know that, as a result of the amnesty, we reckon that something in the region of 25,000 guns and more than 500,000 rounds of ammunition are being or will be being handed in to the police. But that has got to come alongside tougher sentences—in particular, a mandatory five-year sentence for anyone convicted of illegal possession of, or distribution of, prohibited firearms. I hope very much, both in respect of what the Home Secretary said and of gun crime, that these proposals have the support of the whole House.

Q5. [111506]

If the Prime Minister is serious about genuine reform in the NHS, why is he not supporting the Health Secretary against the Chancellor in the debate on the borrowing powers for foundation hospitals?

The proposals are those set out in the Bill; therefore, those proposals should be supported—and will be supported—by everybody. But let me put the question to the hon. Gentleman, since he will be voting against these proposals today. How can he say that he is in favour of local devolution of the health service, and then vote against the measure that actually delivers it? That simply shows that one part of the Opposition is against the investment and the other part of the Opposition is against the reform; only this side stands for investment plus reform.

The Prime Minister will be aware that the Foreign and Commonwealth Office has issued an appeal to the International Labour Organisation and to the International Confederation of Free Trade Unions to involve themselves in the creation of a democratic trade union movement in Iraq. Will he have words with President Bush to establish that the President also presses for this, and supports the development of a labour movement as part of the democratic movement in Iraq?

One of the great advantages of the liberation of Iraq is that the people there should be able to enjoy the same human rights as people enjoy in other countries that have a greater history of democracy and representative government. One of those essential freedoms and rights is the right to be a member of a trade union, and I have no doubt at all that that will form part of the dispensation in the new Iraq that is being created.

Q6. [111507]

I am sure that the Prime Minister, having recently visited the base, will join me in saluting the airmen and airwomen o f RAF Lyneham in my constituency, whose Hercules aircraft are the first and last out of every conflict. Does he agree that a significant part of the outstanding success of Operation Telic in Iraq recently was down to the fact that the Hercules were able to take the stores and personnel in and out? Does he also agree that all future conflicts will equally depend on RAF Lyneham?

I think that I know the point behind the question, having visited the base. First, let me express my thanks and gratitude to the hon. Gentleman's constituents, to all those who work at RAF Lyneham and to the families of the servicemen and women, because they have been extraordinary in their support for our armed forces. In respect of RAF Lyneham, I have nothing to add to what I said when I was there, but I accept and understand the very important role that it has played in previous conflicts and, I have no doubt at all, will play in future conflicts, too.

Q6. [111507]

The Prime Minister will know that British consumers now owe £48 billion in outstanding debts to credit card companies—twice the public sector borrowing requirement. Does he agree that consumers need to be able to compare and contrast the complicated fees and charging structures offered by different card companies? Will he back moves to introduce an honesty box to standardise the presentation of those charges across the industry, so that consumers can choose the best credit card to match their needs and reduce their burden of debt?

I know that my hon. Friend takes a particular interest in this issue, and it is a very serious issue, which is why the Financial Services Authority is looking at it at the moment; indeed, the Government are also looking at it in the context of the review of the provisions of the Consumer Credit Act 1974. Ahead of that, I can tell him that the Department of Trade and Industry has been meeting the credit industry, the regulators and consumer groups to chart the right way forward, and there is indeed enthusiasm for the so-called honesty boxes referred to by my hon. Friend, to set out in advertisements or application forms the key applicable interest rates and charges. I have no doubt at all that that will be an important way to ensure that, when people borrow, they borrow responsibly.

I do not doubt the Prime Minister's commitment to public services. May I draw his attention to one of the most basic of all public services—waste disposal—where it seems that the Government are on a strategy that is drifting towards a disaster that will make the fridge mountain look like a molehill? May I ask him to read paragraphs 77 and 80 of last week's all-party Environmental Audit Committee report on that point and to reflect personally on the very serious implications of what that Select Committee has found?

I will certainly reflect on the Environmental Audit Committee's report, and I certainly hope that we have learned some lessons from the attempt to implement previous European Union directives. Perhaps I can get back to the hon. Gentleman and correspond with him on the particular point that he raises.

Q8. [111509]

How will my right hon. Friend recognise, reward and thank the teachers and support staff up and down the country who have helped thousands more children to learn to read, to get good GCSEs and to qualify for university?

There has been a lot of talk, obviously, about the difficulties that schools and local education authorities have had. One reason for that is the substantial additional increments in pay and the support for pensions that we are putting into the system, and the simple and best way to support teachers is to try to create the environment in which many good schools develop and in which they are happy to teach, because they perform a magnificent job for our children, which is shown in the results that we are achieving. As one earnest of our commitment to our school system, in virtually every constituency—certainly in my own, but I am sure in my hon. Friend's also—we can see the results of the large capital investment programme in primary and secondary schools up and down this country.

Q9. [111510]

Spain has a Conservative tax-cutting Government, with real foundation hospitals. Does the Prime Minister understand why my constituents David and Victoria Beckham might be considering moving there?

The principle of not-for-profit hospitals is also known in Germany, which has a social democratic Government.

Q10. [111511]

Before Easter, I participated in a conference in Qatar on democracy in the Arab world, which included representatives from all across the Arab and Muslim world. There are very big moves among people in those countries to improve democracy and accountability. Can the Prime Minister assure me that his Government will provide help and support to women and men in those countries who are working for more democratic government that is consistent with their countries' traditions and the principles of Islam?

I assure my hon. Friend that we work on our own account and also inside the European Union to promote democracy, good governance and civil rights. It is worth pointing out that, just in the past year or so, there have been elections in Yemen, Bahrain and Morocco, and a referendum has been held in Qatar to approve the new constitution. There are also forthcoming parliamentary elections in Jordan. There is, therefore, a continuing programme of work happening. We and our European partners will do everything that we can to shape the emergence of democracy in the Arab world and to support it, although ultimately these decisions must be for the Arab people themselves.

Q11. [111512]

The 1997 Labour manifesto said of comprehensive schools:

"Children are not all of the same ability, nor do they learn at the same speed. That means 'setting' children in classes to maximise progress".
Will the Prime Minister explain why, six years later, two thirds of lessons in the first three years of secondary school still take place in mixed ability classes?

In the end, these decisions have to be for the teachers and head teachers themselves, but we have done everything that we can to encourage them. The hon. Gentleman will find that to be the case particularly in the new specialist schools, which are getting superb results up and down the country. In opening up the diversity of supply in our education system, we are indeed catering for children of different abilities, and perhaps the best response is to point out yet again that, over the past few years, we have had the best set of school results that this country has seen. According to a recent international report on education, this country now ranks third in terms of how our 11 year-olds are taught in our schools. That is surely something on which we should congratulate our education system.

Q12. [111513]

The Prime Minister will know the case of Catherine Meyer, whose two sons were abducted by her German husband nine years ago. My right hon. Friend kindly wrote to the German Chancellor about the case, but received a very unhelpful reply. Will he please write again to Chancellor Schröder and remind him that it is wrong in principle for individuals to use the German courts to deny a mother access to or contact with her children for almost a decade? Surely we expect better from an EU partner.

My hon. Friend has made numerous representations on Lady Meyer's behalf and, as he rightly says, I have raised the case with Chancellor Schröder. I will reflect carefully on what my hon. Friend has asked me to do, but I should point out to him that we are in touch with the German authorities and discussing a whole range of issues to do with family cases. Obviously, we have to be sensitive about the

degree to which we seek to interfere in the jurisdiction of another country, but, subject to that, I will certainly reflect on what my hon. Friend has said.

Q13. [111514]

The Prime Minister will have read the report from the European Central Bank about the impact on the national health service if we were to go into the euro. Will he be prepared to defend the euro, or the national health service and our whole social service structure?

With the greatest respect to that report, I believe that the maintenance of the national health service is entirely compatible with Britain being part of the single currency. Whether we are part of the single currency depends, as the hon. Gentleman knows, on the five tests.

Parents are understandably confused about school finances this year. In Westminster city council, funding for education has gone up by 65 per cent. since 1997, yet schools are in serious difficulties this year. Meanwhile, the council has found £21 million to spend on other priorities, including a new call centre, while not passporting all the money through to schools. Will my right hon. Friend do what he can to ensure that money is passed through to schools and, when that is done, will he act sympathetically towards those authorities facing broader financial difficulties because of factors such as the census and the mainstreaming of the school standards fund?

The answer is yes to both points. We have obviously put a series of questions to local education authorities, including the one mentioned by my hon. Friend, and it is extremely important that we get proper and detailed answers to them. We can then work out exactly what action to take. She is absolutely right to say that, overall, there has been a massive increase in the investment going into education in this country, which is why it is important that that money is passported through to the schools.

Q14. [111515]

Following the Prime Minister's answer to the hon. Member for Harrow, West (Mr. Thomas), who referred to the outstanding cancer centre at Mount Vernon hospital in my constituency, which is regrettably under threat of closure, will he consider the future of the equally outstanding Harefield hospital in my constituency? Its Anzac centre was recently opened by His Excellency Michael L'Estrange, the Australian high commissioner, in honour of the brave Australian soldiers who were treated there during the great war. The hospital has performed more heart transplants than any other in the world. If the Prime Minister wishes to reform the NHS and provide a foundation for progress, keeping Harefield hospital open would be a good place to start.

I entirely understand the concerns that the hon. Gentleman raises but I hope that he would agree with me that, at least in the first instance, decisions on how we configure local health care should be taken by the local strategic health authority itself. Therefore, it is important that proposals are first made by the locality and followed by a consultation with local people and others who may use the services before finally the decision comes to the Government. If the hon. Gentleman talks to people involved in cardiac care in the country, he will find, as with cancer care, that there has again been a substantial improvement to cardiac treatment. Waiting times are significantly down and there is an increased number of consultants. That again is, of course, because of the additional investment what we are putting into the health service.

Traveller Law Reform

12.31 pm

I beg to move,

That leave be given to bring in a Bill to reform the law in England and Wales as it applies to gypsies and travellers.

Last July, the House allowed me to introduce the Bill that I wish to reintroduce today. Since then, the response that I have received has strengthened my conviction that it represents the right approach to resolve the problems that continue to be experienced in many hon. Members' constituencies because of unauthorised encampments of travellers and the antisocial behaviour that can occur when large groups of travellers congregate. My Bill would establish, for the first time in a legal framework, the right of gypsies and travellers to lead a nomadic way of life. It would also establish the responsibilities and obligations that they owe to others when exercising that right.

Since I introduced my Bill, I acknowledge that the Government have responded to the issue of travellers in several ways. However, they have not yet got to grips with the central issue: ensuring that sufficient sites for travellers are established to avoid the use of unauthorised sites. That is also the aim of my Bill.

Let me remind the House where I am coming from. Over Christmas 2001 and the new year, the national media gave widespread coverage to the unauthorised occupation of Kings park, a public park in my constituency, by a large group of travelers—800 people of all ages in some 200 vehicles and caravans. They said that they intended to stay throughout the entire holiday period, and so they did, despite a county order for their eviction and the requisite notices that were served. I shall not dwell on the effect that the travellers' presence had on the residential neighbourhood during that period—it is on the record—save to say that the experience cost the local community more than £100,000 and affected it in many ways that my constituents never want repeated.

The experience happened at the end of a year in which there was the largest ever number of unauthorised encampments on public parks and open spaces in our borough of Bournemouth. Such encampments continue regularly; Kings park was occupied on a much smaller scale just before Easter, despite measures that had been taken to avoid that happening.

Parliamentary initiatives that many hon. Members continue to take to raise the issue show just how widespread the problem of travellers' unauthorised encampments is. More of us tabled questions on the subject last year than ever before, and several Adjournment debates and ten-minute Bills have called for local authority and police powers to be strengthened to allow travellers to be evicted more effectively and to tackle antisocial behaviour.

In January, my hon. Friend the Member for Billericay (Mr. Baron) introduced a Bill to address another subject related to travellers: those who buy designated green belt land to develop without planning permission. Six weeks ago, the Minister responsible for the issue, the Under-Secretary of State, Office of the Deputy Prime Minister, the hon. Member for Harrow, East (Mr. McNulty), told the local government conference on gypsies and travellers of the initiatives that the Government have recently taken: more cash for the gypsy sites refurbishment grant; a consultation paper on operational guidance on managing unauthorised encampments; and research commissioned from the university of Birmingham on the provision of sites—the report is expected next month—which is in addition to a study by the Institute for Public Policy Research on unauthorised sites.

None of those initiatives will achieve what I believe is necessary—the establishment of the rights and responsibilities of gypsies and travellers within the law. Nor will any of the Government's proposals to date help local authorities such as mine in Bournemouth, which has run out of land to develop, including sites for travellers, and is rightly protecting its public parks and what is left of its green belt to prevent further urban sprawl. For such authorities, the Government propose no new powers to deal with the problem of unauthorised encampments. The fact is that section 61 of the Criminal Justice and Public Order Act 1994 cannot be used when there are no alternative sites; nor does the Government's new draft housing Bill reflect their proposals for sustainable communities that should apply to travellers. Indeed, it appears that gypsy and traveller organisations were not even consulted on the Bill.

My Bill responds to all those issues. It is based on the work of the Cardiff law school and is the culmination of four years' consultation between gypsies and other travellers' organisations, statutory and voluntary bodies such as the police and local authorities, and lawyers and planners who face the problems that arise. Its main provision, in clause 1, is the establishment of a gypsy and traveller accommodation commission, with the principal task of ensuring that there is adequate accommodation for gypsies and travellers in England and Wales. It would be representative of the communities concerned as well as of interested public bodies, local authority and voluntary organisations. It would be expected to respond to problems of antisocial behaviour and unauthorised encampments, such as we have experienced in Bournemouth.

The Bill would require local authorities to facilitate the provision of sites for gypsies and travellers. The Housing Corporation would be empowered to make grants to registered social landlords to enable them to provide and manage such sites. Where, as in Bournemouth, there are no longer any appropriate sites to develop, the commission would explore appropriate sites with and in neighbouring authorities to serve the entire area. The new powers provided to the police to deal with unauthorised encampments could then be applied to all the local authorities in that area, which is not what the Government propose today.

The Bill would require local education authorities to develop strategic programmes to improve the educational attainment of gypsies and travellers and their children. It would also clarify the scope of the Race Relations Act 1976 by acknowledging that Irish travellers constitute a racial group, as do Scottish and Welsh gypsy traveller communities. It would also contain other appropriate provisions.

I submit that my Bill represents a carefully considered approach that provides equality of opportunity and equal access to civic life and social services for travellers and gypsies. It acknowledges that the threat of continuous eviction does nothing for the health and welfare of families, or for the education of children; that only 2 per cent. of travellers live to see the age of 65; and that the traveller infant mortality rate is nearly three times the national average. It recognises that where local authorities have offered suitable land sites, good relations have developed and school attendance and health have improved. A schedule to the Bill would propose a code of conduct for travellers, based on best practice and in consultation with local authorities and traveller groups.

The Bill responds to the recommendation of the Parliamentary Assembly of the Council of Europe passed last year for member states to resolve the legal status of gypsies and travellers. The alternative is to continue to rely on laws to prevent unauthorised encampments, which the police and local authorities are at their wits' end trying to enact. I commend my Bill to the House.
Question put and agreed to.

Bill ordered to be brought in by Mr. David Atkinson, Mr. Terry Davis, Mrs. Annette Brooke, Mr. John Butterfill, Mr. John Battle, Mr. Henry Bellingham, Nick Harvey, Julie Morgan, Michael Fabricant, Andrew Mackinlay, Mr. John Randall and Mr. Kevin McNamara.

Traveller Law Reform

Mr. David Atkinson accordingly presented a Bill to reform the law in England and Wales as it applies to gypsies and travellers: And the same was read the First time; and ordered to be read a Second time on Friday 20 June, and to be printed [Bill 102]

Before I call the main business, I inform the House that there is a limit of eight minutes on Back-Bench Members' speeches. That is because there are so many hon. Members who wish to speak. It is therefore not a day for hon. Members to come to the Chair to ask where they are placed on the list

Orders Of The Day

Health And Social Care (Community Health And Standards) Bill

[Relevant document: The Second Report from the Health Committee, Session 2002–03, on Foundation Trusts, HC 395.]
Order for Second Reading read.

12.41 pm

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

I should inform the House that I have selected the amendment in the name of the hon. Member for Wakefield (Mr. Hinchliffe)

Three years ago we set out our policy on the health service in our 10-year national health service plan. Last April, following the Budget of my right hon. Friend the Chancellor of the Exchequer, I published in the House a follow-up Command Paper, entitled "Delivering the NHS Plan". The Bill implements those plans.

Underpinning the Bill is this diagnosis: the principles of the NHS are right: service is free at the point of use, based on the scale of patients' need, not the size of their wallets. Those are principles to which at least we on the Government Benches hold firm.

Today's health service, however, is the product of decades of under-resourcing. It is the product also of the age in which it was born. If it is to keep pace with demographic change, and indeed with social change, it too must change. The NHS plan sets out the investment and the reforms that are needed to give patients the modern responsive services that they rightly expect. These are clear national standards, devolution of resources, choice for patients and flexibility for staff. It is these reforms that the Bill takes forward.

The Bill strengthens national inspection and the NHS complaints procedure. It modernises NHS dentistry and the welfare food scheme. Should general practitioners vote for a new contract in a ballot, the Bill will legislate for it. The Bill puts power and resources in the hands of local staff and local communities by strengthening primary care trusts and creating NHS foundation trusts. These reforms match the resources that are now going into the NHS and that are bringing about improvements for patients.

Our national health service is the fastest growing health service of any major country in Europe. While in the year before we came to office the NHS budget fell in real terms, by 2008 its budget will have doubled in real terms. That is the difference between a Labour party that is committed to building up the NHS and a Conservative party that is always committed to cutting it back. The hon. Member for West Chelmsford (Mr. Burns) shakes his head, but the situation could not be clearer. The Conservative party's policy document—hideously misnamed "Leadership with a Purpose"—was published at last year's Tory party conference. It boasted:
"Conservatives do not support the tax and spending increases the Government has announced."
Not only do they not agree with that extra spending, they voted against it when they had the opportunity to do so. They now plan to cut that spending by 20 per cent. across the board. That is the Conservative policy for the health service. Members of the Conservative party must be the only people who believe that we can get more out of the health service by putting less in.

The fact that resources are rising in the national health service means that staff numbers are rising too. Nurse numbers are up by 50,000 and vacancy rates are down. For the first time in decades, general and acute beds in hospitals are now growing in number. Waiting lists and waiting times are both falling. That is why the recent report from the independent Modernisation Board rightly argued that the NHS is turning the corner.

This is not the time to cut back the NHS. It is the time to continue to invest in the NHS, and it is also the time to keep pace on reform. The question is how best to go about it. Here again, there is a choice between those of us who believe in reforming the NHS and others who believe that the NHS should now be abandoned. The Bill chooses the former over the latter.

Like all my right hon. and hon. Friends, I stand foursquare behind the principles of the national health service. I do so for the following reasons. With the NHS, we all share in the security-Nye Bevan called it the serenity-of knowing that we all pay in when we can so that we can all take out when we need to, the health of each of us depending on the contribution of all of us. Those were the ideals that inspired the generation of Bevan and Beveridge and they remain our inspiration today. Indeed, in many respects, the case for the national health service, its system of funding and values is stronger today than it has ever been. Now more than ever, we live in a world where health care can do more, but costs more. Since none of us knows when we will fall ill, how long it will last or how much it will cost, having a national health service that pools risk because it is funded through general taxation and is free at the point of use, based on need not ability to pay, is the right way forward for our country. That is the Labour principle.

There is another principle of course. It was spelt out by the hon. Member for Woodspring (Dr. Fox) at the Conservative spring conference just a few weeks ago. It is the principle that the patient pays. As he put it himself, his party plans to develop
"the pay-as-you-go market where patients pay for a single procedure or item of care."
There has been much talk in relation to the Bill of two-tier care. That Conservative policy is two-tier care, and would provide a fast track to treatment for those who can afford to pay and a slower service for those who cannot. Charging for health care is a Conservative policy—it is not a Labour policy. I can tell the House that not one clause of the Bill is about introducing Tory charges. Every clause is about maintaining the NHS as a universal service, free at the point of use and based on need, not ability to pay.

certainly agree with the last thing that the Health Secretary said, but is he aware that in my constituency there is a serious problem with GP shortages? Two practices are short of a couple of GPs, and it is now taking a long time to see a GP. What is there in the Bill to try to address that problem?

Specifically, depending on how and whether GPs vote in a ballot, the Bill makes provision for a new GP contract. When many GPs look at the detail of what is on offer along with the 33 per cent. increase in resources for primary care, they will conclude that it is a good deal for the national health service, and in particular a good deal for GPs. However, may I make one general point to the hon. Gentleman? He said that he supports what I said. The problem for him is that he supports the principle but did not vote that way. When he had the opportunity to back extra resources, precisely to get more GPs into the national health service, he and his colleagues all voted against it

It is not the principles of the NHS that need to be changed it is how it works in practice. One approach is about ends, the other is about means. The Bill preserves NHS values and does so by changing NHS structures. Let me just tell my right hon. and hon. Friends who have concerns about certain aspects of the Bill that the Conservatives want it to be opposed for three simple reasons. First, so that they can claim that Labour could not reform the NHS; secondly, the NHS itself is therefore unreformable; thirdly, as a result, the very first principle of the NHS—care for free—must now go. Whatever they say, the Conservatives do not want NHS reform to happen—they want it to fail. That is their strategy for this Bill, but ours is about strengthening the national health service. The Bill does so, first, by building on the framework of national standards that we have already put in place. It establishes a new Commission for Health Care Audit and Inspection to inspect and raise standards in health care across our country. Patients have the right to know the standards of care in every NHS hospital, and I believe that it is time people knew the standards of care in every private sector hospital too.

For the first time, the new commission will provide independent inspection to common standards in both public and private sector hospitals. With more resources going into the NHS, people have the right to know what they are getting out of it. Far from adding to bureaucracy, as the reasoned amendment argues, the new inspectorate will merge into a single organisation the health functions of the Commission for Health Improvement, the National Care Standards Commission and the Audit Commission, to report on the state of the NHS, the performance of all parts of it, and indeed the use to which NHS resources are being put.

The Bill establishes a sister organisation, the Commission for Social Care Inspection, to do a similar job in social services—to guarantee standards of care for some of the most vulnerable people in our society, and in particular children and the frail elderly. Both commissions are more independent than the structures that they replace. They will both be under a duty to work together to bridge the historic divide between health and social care, which has remained unreformed for too long, so that we have what many of my right hon. and hon. Friends have long argued for: not health care competing against social care, but a single, seamless system of care.

The new commissions, like the National Institute for Clinical Excellence and the national service frameworks that we have introduced, will help raise standards of performance in all parts of the NHS.

I am puzzled, and one or two constituents have phoned me, about the lower-paid workers in the health service—the porters, cleaners and maintenance workers. They are afeard that when foundation hospitals come into being, privatisation will take over, they will be thrown to the wolves-or perhaps I should say dogs, as wolves is not a good word right now and their wages will be halved. Can my right hon. Friend give them a guarantee that that will not happen, and that their present wages will be guaranteed?

Yes, indeed. I do not know what the allusion to wolves was. My hon. Friend was being slightly wolvist. As regards the agenda for change, which is the new pay system for people in the national health service, that will apply in all aspects of the national health service, across every foundation trust. Every part of the national health service will implement it. As my hon. Friend knows, the new pay system that we have negotiated with the NHS trade unions is very good, particularly for low-paid workers. It will guarantee, for the first time in the national health service, not the national minimum wage that applies across other industries, but an NHS minimum wage that will guarantee workers a minimum of £10,000 a year. For many of us, that is not a handsome reward. For very many cooks, porters and cleaners, it represents a real improvement, and it has come about because of the policies and investment that the Labour Government have put in place.

The framework of national standards is a means to strengthen the equity that my hon. Friend asks for in the NHS, to ensure that the quality of care that people receive does not rely on the lottery of where they live.

Will any of that result in digital hearing aids being available to my constituents, who have been told that they will not have them until 2005? The Secretary of State says that the postcode lottery will no longer apply, but my constituents cannot get that important facility until 2005.

The technology for digital hearing aids to be introduced on the national health service has existed for 20 years. It is only under a Labour Government that digital hearing aids have been made available on the NHS, so before the hon. Gentleman starts bleating, he should persuade those on his Front Bench that the best thing to do is what the Labour Government have done, and commit to investment in the NHS.

National standards are helping to overcome the divide between rich and poor-the lottery of care that has existed for too long. It is kick-starting the process of improvement that was long overdue, but ultimately improvement is delivered locally, not nationally, by front-line staff in front-line services.

On the lottery of care and the action that my right hon. Friend is taking to remove it, will he give me an assurance that North Cheshire hospital trust will not be disadvantaged by the proposals, and that the hospitals, and in particular Warrington hospital, will receive all the resources that they need to provide essential patient services?

I know that my hon. Friend works closely with the local health service in Warrington, and she knows that in the past I have visited her town and gone with her to see the local hospital. I can give her those guarantees, because the system of funding will continue to work in the national health service as it does now. The funding will go from the Department of Health down to the primary care trusts. It will be for the primary care trust then to determine which hospital, if it wants to commission services from local hospitals, should get the resources. In most places, such as my hon. Friend's constituency and mine, there is one local hospital, so it would be pretty surprising if the local hospital did not continue to benefit from the extra resources that are going into the national health service.

Where the power needs to be located in the NHS nowadays, alongside the extra resources that we are putting in, is among local people, in order that we get more responsive local services.

May I ask my right hon. Friend about independent lay monitoring of foundation trusts? I understand that patients forums will not be attached to foundation trusts. Can he give me some assurance about lay monitoring?

I know that my hon. Friend has been concerned about these matters in the past and continues to be so. NHS foundation trusts will have an entirely different accountability structure from the present one, where accountability is all upwards to the Department of Health, bureaucrats and Ministers. In future, with NHS foundation hospitals the accountability will genuinely be to local people and to local staff, so it will be an improved form of democracy and accountability within the national health service. Even then, of course, there needs to be some independent scrutiny of how the NHS at local level works.

I can give my hon. Friend the assurance that the local PCT patients forum will have precisely the sort of powers and responsibilities that it needs to ensure that the standard of services in each of the NHS foundation hospitals is as high as possible. That must be right, and we must learn from the scandals of the past, when all too often, because there has not been independent scrutiny and oversight, problems that have occurred and that everybody has known about have not been picked up and properly dealt with.

Foundation hospitals will be inspected by the Commission for Health Improvement, will be regulated by the regulator, will form legally binding contracts with the PCTs, and will also be answerable to the governing body that is elected from self-appointed people in a catchment area, or from patients and staff. Will my right hon. Friend clarify for my constituents how they will know who will be responsible for which decisions? Surely that is at the heart of accountability.

Yes. My hon. Friend's constituents will directly elect the governing body. If she thinks that the current structure of appointments from Whitehall, whether by a Minister or by an independent appointments commission, in any way, shape or form represents meaningful local accountability, I would be surprised. Like her, I am a democrat. I believe in the democratic principle. I am the first to admit that democracy is not always perfect in practice, but it is a pretty good principle.

Is my right hon. Friend saying that when 35,500 of my constituents voted in a ballot in February, when all the non-executive directors were against what the local population wanted, those 35,500 people would be able to vote in their own directors if they disliked the way in which our hospital trust was going?

I am well aware of the situation in my hon. Friend's constituency, and of the part that he played in that successful ballot in getting the hospital to change its mind about some of its proposals. That is a good thing, not a bad thing. If we are honest, every hon. Member knows that all too often in the national health service—the public service to which the public are more attached than any other—the way that local services have gone about public consultation has been shameful.

I am sure that my right hon. Friend is genuinely interested in trying to promote greater local accountability, but will he reflect on the fact that there was a good deal of argument about community health councils, and a good deal of discussion of the new patient and public involvement forums, patient advice and liaison services and so on, and that there is a good deal of concern and confusion in some areas about how they are being introduced? There is concern that the Bill could add lo the confusion about how independent patient monitoring vis-à-vis the foundation trust, not vis-à-vis the PCT, would work. Does he acknowledge that that concern is widely shared and needs more thought, if the Bill goes through tonight and proceeds to Committee?

There is no reason why those detailed issues cannot be considered in Committee or on Report, but let me make one general point to my hon. Friend. Under these proposals, individual NHS patients and members of the community—and, what is more, local members of staff—will for the first time have the opportunity for which they have been clamouring for many years: they will have a say in how their local health service is run. We do not object to that principle for social services, so why should we object to it for health services?

The Secretary of State just mentioned the community representatives in hospitals. I welcome the proposals, but does he recognise that people who migrate towards a particular hospital, either across England or from Wales to the English counties, to take advantage of services there, are part of that community? When we come to the detailed consideration, if the Bill passes into Committee, how will those people be represented?

Obviously, the measures governing NHS foundation trusts apply only to England. The way in which the national health service is run in Wales is a matter for the Welsh Assembly, and rightly so. However, where there is patient movement, it is perfectly possible that patients from Wales who have been treated in English hospitals will have the opportunity to have a say, to vote and to exercise a democratic right. With public services, that must be a good principle, not a bad one.

Does my right hon. Friend accept the fact that there are many of us on the Government Benches who, although we are minded to give the Bill a Second Reading, still have some concerns that need to be addressed—specifically, those involving unfair advantages in staff recruitment, the speed with which all hospitals will be brought up to foundation status, and the arrangements for democratic accountability? Will he give an undertaking that he will continue to address those concerns during the later stages of the Bill's progress?

I give my hon. Friend that assurance. He and I have discussed this issue; he has spoken about his local area and I know that he has concerns because, rightly, he wants to ensure that if there are opportunities for NHS local services to be improved, that improvement should be available not just in some areas but in every area. Of course we will consider the proposals that are made and the discussion that takes place.

Can my right hon. Friend tell me what is in the Bill for the people whom I represent in Bristol—an area of considerable inequality in health—when the United Bristol Healthcare NHS trust has no stars, and people in the south of Bristol, which forms part of my constituency, have been campaigning for at least 30 years for a community hospital? Will he confirm that the regulator will not have the power to top-slice the NHS investment budget, thus giving foundation trusts an undue share of the cake?

On that specific point, I can give my hon. Friend an assurance, but, if she will allow me, I will come to that subject later; she has raised it before, and so have other hon. Members. She asked me what was in this for Bristol. Many of the other measures in the Bill, most notably the new Commission for Healthcare Audit and Inspection, will make a real difference, particularly in areas such as hers. She has often spoken to me about the problems in Bristol and the wider Avon area, and she knows that we try to put additional assistance in there, and that we shall make further assistance available, especially in areas such as hers, where some hospitals are struggling at the moment.

One of the great myths that sometimes pervade the debate about the national health service is that we have a one-tier health service today. We do not. Some hospitals are good, some are poor and some, sadly, need to improve. Each of them has a different starting point, so we need a different approach. It is perfectly reasonable to say that those who are doing reasonably well and have a track record of success have the ability to exercise freedom responsibly. Others, including some in my hon. Friend's area, need help and support and, where necessary, more intervention, including extra financial assistance—and that is what we plan to provide.

The Government are going in the right direction, but there is some poetic justice here, in that the Secretary of State is being attacked in the same terms as the Labour party used to attack us when we were trying to free up the system. On reflection, does he not think that we should take that into account when we conduct our debates on this matter in the House? He is facing exactly the same charges about privatisation and two-tierism as we did.

Support from the hon. Gentleman is about as welcome as myxomatosis in a rabbit hutch—although I hope that it does not have the same deadly consequences. The fundamental difference between what happened then and what is happening now is that in the internal market there were no national standards, the resources were not going into the national health service, and there were not the means to improve every NHS hospital. That is what we have put in, and that is what the Bill continues to do. It is simply not the case that this is some sort of reinvention of the Conservative internal market. For reasons that I shall come to in a moment, this is not about more competition; it is about ensuring co-operation and raising standards across the whole NHS.

I shall give way to the hon. Gentleman, and then I shall make some progress.

What would the Secretary of State say to constituents of mine in the greater Portsmouth area whose hospital, despite the best efforts of the staff and the management, who are trying to turn round a failing situation, is still carrying forward an inherited deficit that is retarding patient care? What is in it for them, when they have been told that they cannot aspire to foundation status for at least five years? What assurances can the right hon. Gentleman give to the people of the Portsmouth area to give them the confidence that they ought to have in their health service the confidence that their resources will not be cut, but that resources will be put in to improve their situation?

It is slightly premature for the hon. Gentleman to say that his local hospital has been told that it will not become an NHS foundation hospital for another five years. Nobody has been told that. Thirty-two hospitals have applied at the moment, and I will consider those before too long. Then, no doubt, there will be further waves of NHS foundation hospitals. In the meantime, we will try to get extra resources and support to hospitals that are struggling a bit at the moment, so that they all have the opportunity to acquire the freedoms that go with NHS foundation trust status. That must be right. This policy is not just for an elite few; I want to see it available for every hospital, including the hon. Gentleman's local one.

If the hon. Gentleman and my hon. Friend will give me a minute, I will make a little more progress; they can come in later.

Sustaining improvements in NHS performance can happen only when staff have more control and local communities have a greater say in how services are run. Different communities in our country have different needs. They are not uniform; they are multifaceted and multicultural. For all the great strengths of the NHS, too often the poorest services have been in the poorest communities. For those of u—on the Government side of the House, at least—who believe in the principle of social justice, it is a scandal that, for 50 years, health inequalities between the wealthiest and the poorest in our country have got wider, not narrower. For 50 years, uniformity of provision has not guaranteed equality of outcome.

The best way of tackling this unfairness is to give local people and local staff a greater say over how the health service is run. We have local councils to run local services precisely because we recognise that needs differ between communities. That is why we created primary care trusts and devolved power to them, and why they now control three quarters of the total health service budget.

Far from weakening the role of PCTs, as the amendment in the name of some of my right hon. and hon. Friends argues, the Bill strengthens that role. For example, it gives PCTs control of NHS dentistry and the £1.8 billion that goes with it. It gives them a duty to secure the provision of primary dental services, which they can do either through contracts with dentists or by providing dental services directly themselves.

I believe that the provisions in the Bill will help to plug the existing gaps in dental services. The Bill will also give PCTs new powers to focus on health prevention as well as treatment. The reason for devolving control over health services in that way is to get more responsive services for patients. That is as much the case for hospitals as it is for primary care.

My right hon. Friend has mentioned democracy and PCTs. If democracy, in terms of community involvement, is so important, why are we not starting the other way round and going for the election of PCTs?

As I have said to my hon. Friend in the past, I have no objection in principle to that. However, the issue is one of timing. She knows that in her area as well as mine, the primary care trusts are just up and running. They are new organisations and many of them are embryonic. They have to be able to commission services. Otherwise, the resources going into the national health service will not achieve the right results locally. Primary care trusts must have the ability to decide where services are going, whether that is the acute, community or primary sector. Frankly, they are not at a suitable stage of development to allow them to do that. Down the line, I have no objection whatever to the idea of applying the democratic or foundation principle to primary care trusts. All I would say is that the biggest risk in doing so now is destabilising precisely the organisations that I know she is committed to building up.

I welcome the proposal on foundation hospitals and look forward to my local hospital, Addenbrooke's, becoming a foundation trust in the first wave. However, I seek reassurance about the excellent collaborative networks that have been set up, including, in particular, the East Anglia cancer network. Can he assure me that devolution to local control will not result in the dissolution of those very good networks?

Yes, I can give my hon. Friend that assurance. I want to deal with some of the details in a moment, but suffice it to say for now that, under clause 27, there are obligations that will apply to each NHS foundation trust. This approach is not about: establishing a series of little islands in the national health service, but about ensuring that we raise standards of care across the whole service. I have always enjoyed visiting Addenbrooke's, and, as she rightly says, it is clear that its clinicians and managers want to collaborate with others to improve care for patients. Nothing that we do will get in the way of such collaboration or co-operation.

Does the Secretary of State agree that one of the elements of our multi-tiered NHS is that 300,000 people last year had to dip into their savings, without insurance, to pay for their own operations? That represents a threefold increase since the election. Does he agree that the Government's health policy will not have succeeded unless that number is reduced by the next election?

That is precisely why I want to solve the dilemma of people who are forced to choose between waiting for treatment and paying for it. The problem for the hon. Gentleman is that that is his party's policy—it wants more people to pay for treatment. That is what the hon. Member for Woodspring set out in his speech and it is what the Conservative party believes in.

Is it not the case that the hon. Member for Woodspring (Dr. Fox) not only wants people to dip into their own pockets, but wants other taxpayers to subsidise them?

Not for the first time, my hon. Friend is absolutely right. It is sorely tempting to pursue that point in detail and at length, but given the other issues that we have to deal with it would probably be wise not to give way to that temptation.

I shall do so in a moment, but let me make a little bit of progress, if I may.

It is still not certain that my right hon. Friend will get that vote, to be quite honest.

One of the problems that I have encountered over the years is that the consultants and surgeons have far too much power and determine the success of a hospital. In my constituency, when consultants and surgeons see somebody in their hospital and tell them that there is a nine-month waiting list, they often also tell them that they can see them three weeks later in a private hospital. Is it not about time that we took away some power from such consultants? How will foundation hospitals achieve that? It seems to me that they will give consultants more power, not less.

I shall reserve judgment on that matter.

I know that my hon. Friend has a close working relationship with Dryburn hospital in Durham city and that, like me, he is full of admiration for the work of its consultants. Overwhelmingly—this is not true of everybody in any walk of life—consultants do a very good job of work for the national health service and NHS patients. However, if this is a public service, it must be right that the public receiving it have a greater opportunity to have a say about how it is run. Services should not be run only by professionals. I agree with him. I think that the professionals should have a say and that we should have some humility about that. I do not treat a single patient; thank heavens for them as well as for me! I do not manage a hospital or a health centre. The people out there do that, and it seems to me that they should have some more power and control. Equally, surely the communities that receive these public services must have a greater opportunity to have a say. That is precisely what the NHS foundation trusts are all about.

I should like to move on, if I may, because I have taken a lot of interventions.

It is very tempting to give way to the right hon. Lady, but I wish to move on.

In this country, the NHS has for 50 years provided good care to millions of people, but it was formed in the era of the ration book. People expected little say and had precious little choice. Today, we live in a different world. Whether we like it or not, this is a consumer age. People demand services that are tailored to their individual needs. They want choice and expect quality—we all do it and we all know it. Those changes cannot be ignored, they are here to stay and they challenge every one of our great public services.

There is a choice about how we meet that challenge. Some say that we can do so only through the market mechanism of forcing patients to pay for their treatment. For reasons of equity and efficiency, we say that patients should not be forced out of the NHS to pay for themselves, but should be able to stay with a tax-funded NHS that is reformed and capable of providing the more responsive and modern health care services that people rightly expect.

Today, however, the NHS is controlled from the top down. If it is to be more responsive, it needs to be run from the bottom up. It cannot be right that while Whitehall is free to direct every hospital to do everything from how to cook turkeys to how to wash the bed linen—such instructions have been issued in the past—hospitals are not free even to appoint their own doctors or nurse consultants without approval from somewhere else further up the command chain. An organisation employing more than 1 million of the most highly trained, dedicated people in our country simply cannot be run in that way. Day in, day out, we put our trust in the hands of those front-line NHS staff to provide services. It is surely time that we trusted them with greater control over how those services are designed and run. It is time that we trusted local communities, too, so that they can hold those services to account. Together, NHS staff and the communities that they serve are in the best position to deliver the more responsive patient-focused services that the modern world demands.

I agree with everything that my right hon. Friend says about the importance of having more flexibility in the NHS and that local decisions should not have to be agreed nationally. However, he still has not convinced me that his way of doing that is the right way in respect of foundation hospitals. Surely, we have self-governing trusts at a local level. Why cannot we start where the inequalities are greatest, in areas such as north Stafford shire, where we have experienced inequality of health and are waiting to add to the investment that we have already received from our Labour Government? Why can he still not convince me that foundation hospitals are the right model to proceed with?

The right hon. Lady is already on her feet, but if I can take fewer interventions for now, perhaps I shall make a little progress.

My hon. Friend will find that when we give the go ahead—I want to be able to do so—for the first wave of NHS foundation hospitals, many of them will be in precisely the sort of areas about which we should be most concerned. They include the poorest communities, such as Liverpool, Bradford, Sunderland and Doncaster. Those are hardly the most affluent parts of the country. She is right about local health inequalities, but if we are to address them the issues must be dealt with locally and not nationally. With the best will in the world, we have tried for 50 years to deal with them from the top down with a one-size-fits-all approach, but what has happened to health inequalities? The gap has become not narrower, but wider.

I should like to refer back to the issue of networks. Addenbrooke's hospital is situated in my constituency. If it or other NHS trusts want to work with other hospitals and bring them together in a network, as an alternative to individual NHS trusts becoming individual foundation trusts, will the legislation permit them to do so? As it stands, it suggests that one NHS trust equals one NHS foundation trust, and I want the Secretary of State's assurance that networks are able to seek foundation status.

The hon. Gentleman has read the Bill carefully, and he knows that as drafted it does not permit that. If it is a matter that he wants to address, we shall consider it. It is wise, however, to caution him that we should not run before we can walk. We want to establish the principle, to ensure that it works, and to make it widely available across the national health service. There may be different ways of applying it—I do not know—but at this stage, on Second Reading, the Bill is about establishing the very principle of how we move forward with NHS foundation hospitals.

My right hon. Friend will be well aware of the concern that foundation hospitals may be able use their flexibilities to poach staff, thus damaging other hospitals. Will he give an assurance that if my local Derby hospitals achieved that status, they would operate the "Agenda for Change" agreement in the same way as other hospitals? In particular, would they be required to consult the other local hospitals that my constituents use if they were to employ the flexibilities within "Agenda for Change" to seek to improve rewards for staff, so that there would be co-operation about the local staffing network in local hospitals?

My hon. Friend, who is concerned about these issues, knows that the "Agenda for Change" pay system is a very good deal, and, like me, welcomes the fact that in their ballots the Royal College of Nursing voted for it by more than 80 per cent. and the Royal College of Midwives voted for it by more than 90 per cent. I look forward to the other trade unions, including my hon. Friend's union—Unison—and Amicus, getting on with their ballots so that we can get the "Agenda for Change" pay system implemented as soon as possible. When it is implemented, it will apply across the piece in every part of the national health service, whether in an NHS foundation trust or an NHS trust.

With our national frameworks of standards and inspection in place, our reforms are about opening up the system—

I shall not give way to my hon. Friend for a moment or two, if he does not mind.

Our reforms are about opening up the system so that it becomes more responsive to the patients who use it. NHS foundation trusts are part of that wider reform programme. They are about giving the staff who provide the services—doctors, nurses, managers and other front-line staff—greater control over how they are designed, delivered and run. They are about giving local communities a bigger say. They are about getting more responsive services for patients. That is why organisations such as the British Association of Medical Managers and the NHS Confederation so strongly welcome NHS foundation trusts. It is why doctors such as the renowned Oxford cancer specialist, Professor David Kerr, told us:
"Foundation status will make it much more likely that senior clinicians will become engaged in service improvement; that local solutions will be found to overcome the barriers that stand in the way of optimal care; that patients and corers can have a voice that helps shape their service."
And it is why in places such as Doncaster in Yorkshire, Addenbrooke's in Cambridge, and UCLH—University College London Hospitals—medical committees and staff-side organisations are backing their local hospitals' efforts to become NHS foundation trusts. The policy came about through discussions with staff and managers in the NHS. It has been developed in discussion with NHS hospitals. They say that what they want is greater freedom to innovate—not outside the NHS, but inside it.

I first outlined this policy more than a year ago. Since then, several concerns have been raised about it. Following dialogue and discussion, including with many of my right hon. and hon. Friends, the Bill attempts to address those concerns. Throughout, it gives more freedom to NHS hospitals, but balances those new freedoms with appropriate and necessary safeguards.

First and foremost, NHS foundation trusts will be NHS hospitals. They will treat NHS patients according to NHS principles, but they will have greater freedom to run their own affairs. Freeing NHS foundation hospitals from day-to-day Whitehall control will improve care for patients by encouraging greater local innovation in how services are delivered. As one senior nurse, Hazel Gregory from Aintree hospital, put it last week:
"morale is really high here but if we are allowed more freedom to do the things we want, I can see it going even higher".
I reject the notion advocated by some that the only place where enterprise flourishes is in the private sector. There is a spirit of enterprise in the public sector, inside our national health service, but for too long it has been held back. Releasing the innovation and imagination of NHS staff requires greater freedoms for NHS hospitals.

The Bill frees NHS foundation trusts from powers of direction from Whitehall that have been in place for umpteen years. That will give NHS hospitals the freedom to employ their own staff and to control their own assets. The Bill also gives them the ability to borrow—either from the public sector or from the private sector.

The first wave of foundation trusts is supposed to be a list of the highest-performing hospitals—three-star hospitals. However, given that the three-star system does not reflect clinical performance, what confidence does the Secretary of State have that his choice of the first trusts to receive the privileges of foundation trusts is the right one? Is he confident about the selection system and assessment by the very Whitehall civil servants whom he has criticised?

Do I have confidence in the system? Yes, I do. As I have said to the Select Committee on Health on many occasions, the star rating system is far from perfect. Any system of performance rating in any organisation, in any industry, anywhere in the world, is far from perfect. For the first time, however, the star rating system is making transparent what we already know: that some hospitals are better than others. That is a fact of life that we must address. The way to do that is to ensure that those who are capable of exercising more freedom get the opportunity to do so, then to provide extra help, support and resources into NHS organisations that have fallen behind.

Speaking as a Whitehall-watcher of 40 years' standing, is not this an historic occasion, in that never before has Whitehall striven so hard to devolve and decentralise with so much resistance from so many of us who purport to represent localities?

My right hon. Friend, in his inimitable manner, makes an extremely good point. Nye Bevan once said that the purpose of getting power was to give it away, and that is the principle that must be right in our public services if they are genuinely to be in tune with the needs of the local communities and more responsive in the way that people nowadays rightly expect.

I note from the amendment that we are being invited to decline to give the entire Bill its Second Reading instead of waiting to see the nature of the Bill that emerges from Committee on Report. That is perhaps a strange way of going about parliamentary business. Can the Secretary of State advise me as to what my constituents would lose if other parts of the Bill unrelated to foundation trusts were to be lost?

They would lose the whole Bill. They would lose the new inspectorate, the new provisions for NHS dentistry, and the new cost recovery scheme that ensures that it is no longer the taxpayer that pays for wrongdoing, but the wrongdoer, which is precisely the principle that Labour Members have long argued for. The Bill contains a raft of measures. I readily admit that some are more popular than others, but none the less it is a Bill that is about modernising and strengthening the whole national health service, and doing so on the basis of NHS principles.

Given that the Secretary of State, backed by the Prime Minister, originally appeared to support the principle that foundation hospitals should be free to borrow on the open market, outwith central control, in order to fund the necessary expansion of services, but that he has now submitted to the imposition of a Treasury straitjacket, can he tell the House whether he and the Prime Minister came to be persuaded that the Chancellor was intellectually correct upon this subject, or did they just think it politically expedient to give in to him?

The Bill gives NHS hospitals substantial new freedoms to borrow. They did not have the right to borrow from the private sector in the past but they will have it in future. Hospitals told me that they want to use the extra capital that they will get through borrowing to invest in new scanners, more efficient equipment—

I shall give way shortly, but I have given way many times and many other colleagues want to speak. [Interruption.] I am generous and I hope that others will reciprocate later.

Hospitals have told me that they will use the extra resources to invest in new services not only in the hospital but in the community. Clause 12 provides that they can borrow only what they can afford to repay. To those who say that that will mean robbing Peter to pay Paul, clause 3 makes it clear that the independent regulator, who is charged with policing the way in which NHS foundation trusts work, will have to take account of the impact of their borrowing on the wider health service.

In discharging his functions, clause 3 provides that the independent regulator will have to take account of the Secretary of State's wider obligations under the National Health Service Act 1977, which a previous Labour Government passed to
"provide a comprehensive health service and the effective provision of health services which also must be free of charge".

No, not for a moment or two. I have given way a lot.

Some of my hon. Friends have expressed anxiety that NHS foundation trusts undermine the new primary care trusts. I want to reassure them that that is not the case. National health service foundation trusts will rely on PCTs for their income in the same way as every other NHS hospital. Primary care trusts will continue to have the power to use their resources as they see fit. To strengthen the hand of primary care in general, especially PCTs, they will also be represented on each NHS foundation trust's board of governors.

Hospital will not be forced to compete against hospital. The Bill enshrines co-operation, not competition. When my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) first introduced a legal duty of partnership in the Health Act 1999, he said on Second Reading:
"The Bill will give all the national health service organisations a duty of co-operation, in place of the competition that the Tories tried to force on them".—[Official Report, House of Commons, 13 April 1999; Vol. 329, c. 41.]
I can give the same commitment today. The legal duty of co-operation for which the Bill provides is exactly the same as that in the 1999 Act. Just as the duty applies to NHS trusts now, it will apply to NHS foundation trusts in future.

On Friday, I met representatives of my local primary care trust and my local hospital trust in Barnsley. I asked them how they believed that foundation hospitals would affect the community. They said that they thought that they would be detrimental because the PCT has a substantial deficit, which was carried over from the previous area health authority before we moved to strategic health authorities. The debt is approximately £13 million, which has to be brokered each year. That means that there is less money to go round. They fear that if a neighbouring hospital receives foundation status, it will attract people from Barnsley, who will rightly expect to receive the better treatment. That will draw resources from the area, to the detriment of—

Order. The hon. Gentleman should conclude his remarks. I think that the Secretary of State understands the question.

The Bill does not alter the power of the primary care trust in any way, shape or form. The PCT holds the power. I have found that, in life generally, and especially in the case of public services, those with more money have a bit more power. The PCT will decide where the money goes in my hon. Friend's constituency as it does in mine and in every other constituency.

I did not intend to intervene on my right hon. Friend, but since he has mentioned me, I shall ask a question. If the proposition that all parts of the national health service should co-operate is to continue to apply, why did he tell primary care trusts that he wanted hospitals to compete for their business?

With all due respect, my right hon. Friend knows that that is not the case. He was partly responsible for introducing primary care trusts. They rightly argued that we should have one local organisation that could commission services in a way that was appropriate to the needs of the local community. It is up to the primary care trust to decide where best to deploy its resources. That must be right otherwise we will never get the best services for NHS patients. The Bill's purpose is to ensure that we get the right services to patients.

The Secretary of State has just said that power lies with the primary care trusts. In that case, why will the Bill "democratise the providers", to use his words, and not the commissioners of health care?

I believe that the hon. Gentleman has been present for most of my speech. Perhaps he was asleep for part of it. [Interruption.] It is a long speech because I have tried to answer a lot of question, including many from Opposition Members. I answered the hon. Gentleman's question when I replied to my hon. Friend the Member for Vauxhall (Kate Honey), who is my local Member of Parliament. It was right to answer her question because I ask her many questions. I said that I had no problem with applying the principle of democratisation to primary care trusts but that now is not the right time to do it because the PCTs are not new.

The Secretary of State says that he has no objection in principle to introducing a democratic mandate into the primary care trusts when they are more established institutions. However, is not he creating a dilemma that cannot be resolved? There will be two democratic mandates—one in the NHS foundation trusts and the other in the PCTs. Which will prevail?

The right hon. Gentleman makes a reasonable point, which I shall try to answer reasonably. It depends on the form of democratisation that one would select for primary care trusts. For example, in the Bill, we have opted for a membership structure because the people who become members of an NHS foundation trust will incur specific legal obligations. It must therefore be right for them to opt into those obligations, which would otherwise be imposed on them. There are other forms of democratisation. For example, for primary care trusts, we could choose a model that was based on a local authority area, not least because many PCTs are now coterminous with local authority areas. The right hon. Gentleman looks startled, but coterminosity exists between PCTs and local authorities. If he wants such a proposal to be taken forward and the principle entrenched, I hope that he will vote for the foundation principle. I suspect that the hon. Member for Woodspring will tell us that Conservative Members will vote against it.

I presume that the right hon. Gentleman wants to make a personal statement.

I am grateful to the Secretary of State for giving way a second time, but if he was genuinely trying to persuade us to vote for the Bill on the basis that it is more radical than the policy that we introduced in 1990, he might find a ready constituency on these Benches. The problem with the Bill and the right hon. Gentleman's answer is that he is not persuading us that the measure is an effective vehicle for implementing the policy that he claims to espouse.

My hon. Friend has done that job adequately. I have not argued the case that I suspect the right hon. Gentleman would like me to present. The Bill is not about reinvention in the internal market. He is painfully aware that there were no national standards in 1990—after all, he was Secretary of State at the time and had to grapple with precisely the same problems of trying to devolve power and ensure equity. Every health care system in the world is trying to find ways in which it can ensure equity through national standards and greater responsiveness through local control. The right hon. Gentleman knows that getting the balance right will ensure that health services in this country are more modern, just as people in other countries try to achieve that.

No. I thoroughly respect the fact that the hon. Lady has worked in the health service. However, I shall not give way.

NHS foundation trusts will not be able to make a profit or pay a dividend. There will be a legal lock on their NHS assets, ensuring their continued use for NHS patients, and the proportion of income that foundation trusts can earn from private patients will be capped at current levels. This is the first time that that has happened in the NHS.

NHS foundation trusts will strengthen public ownership, not weaken it. They will be owned and controlled by the public locally, not nationally, so that the relationship between local hospitals and local communities can be strengthened. In no way can the Bill be reasonably described—as some have argued—as privatisation or a step in that direction, through the front door, the back door, or the side door. This is not privatisation; it is democratisation of the way in which our health service is run.

For the first time, instead of the centralised system of Government appointments to hospital boards, there will be direct elections of hospital governors by local people and local staff. Strengthening public ownership by making NHS foundation trusts more locally accountable will particularly help services in poorer areas. It is true that we are starting with existing three-star NHS hospitals, but, as I have said, in time the foundation principle will be extended not just to primary care trusts but to mental health trusts. So far 32 NHS hospitals have applied. I shall make decisions about those applications shortly, and I hope to be able to approve the vast majority.

I am also introducing a new hospital improvement programme, including extra financial support, to help each and every NHS hospital to become an NHS foundation hospital during the next four to five years. By autumn this year, each NHS trust will have a clear timetable. This policy is for all NHS hospitals, not just some. It is not about elitism or two-tierism. It is about levelling up, not levelling down. It is about raising standards in every NHS hospital.

These are the principles on which the Bill is built: community empowerment, staff involvement and democratisation. But money alone cannot deliver the modern, responsive health services that our nation needs. To obtain the best from the money, the NHS must be properly organised. I have heard it said that as the extra investment is now paying dividends in the NHS, no further reforms are needed. It is true that those resources are tackling the historic capacity problems that the NHS has faced for decades, but it is equally true that the NHS must change if it is to give the public the more responsive services that they rightly demand nowadays. That is not because the national health service has failed; it is because the world has changed.

Collectively funded public services are challenged as never before. The right in politics and in the media say with ever-growing conviction that the only way in which to make services more responsive is to force patients to pay for their treatment. They want to prove that the NHS must fail. Our job is to show that it can succeed—to prove that an NHS based on traditional Labour values can give patients a modern, responsive service.

Reform has always been difficult in the national health service. The pioneers who created that service found that. The job of re-creation will be no less difficult, but it is no less necessary. We would be failing both the public and, I believe, ourselves if we did anything other than press ahead with these reforms. This is the era of public service investment. It must also be the era of public service reform.

I commend the Bill to the House.

1.43 pm

Notwithstanding the huge interest on the Labour Benches, there can seldom have been a Bill whose importance has been so over-hyped. I know that nowadays everything that the Prime Minister says must be tinged with messianic overtones, but to describe this Bill as being of monumental historic importance is ludicrous.

We need to see the Bill in its proper context. The language of new Labour usually refers not to the treatment of patients but to the patient's journey—although from where to where has never been very clear. Perhaps the more important journey to talk about in the context of today's debate is new Labour's journey. Back in 1997, Labour's manifesto stated:
"Under the Tories … the market system has distorted clinical priorities … Labour will end the internal market in healthcare … The Tory attempt to use private money to build hospitals has failed to deliver."
Now we see the creation of a different internal market— and, far from being abandoned, the private finance initiative has been elevated to near-religious status under this Government.

Shortly after he took office, the Secretary of State himself famously told a meeting of health chiefs that he would
"come down like a ton of bricks on anyone who has anything to do with the private sector".
He then oversaw the introduction of the concordat with the private sector, and the expansion of primary care trusts to enable the private sector to tender for NHS work. How people change.

In June 2001, the Secretary of State told the House
"by and large, we thankfully have one monopoly provider and that is the NHS. As long as a Labour Government are in power, that will remain the position."—[Official Report, 26 June 2001; Vol. 370, c. 500.]
By January 2002, the language had changed somewhat. He told the New Health Network
"This middle ground between state-run public and shareholder-led private structures is where there has been growing interest in recent years. Both the Right … and the Left have been examining the case for new forms of organisation such as mutuals or public interest companies".
That is a welcome conversion, if we assume that the actions match the rhetoric.

I agree with the point that my hon. Friend is making. The Secretary of State has tried to make out that this is radically different from the thinking that we were developing in the early 1990s. It is not, in fact, but if we support the basic direction in which the Government are going, why do we not vote in favour of Second Reading, try to amend the Bill in Committee and then, if necessary, vote against Third Reading?

As I proceed, I think that it will become increasingly clear to my hon. Friend that, when we believe something is the right thing to do, as we did in the case of Iraq, we give the Government our full support, whereas when we believe that the Government are going wrong—in this case, legislating not just for a timid imitation of what I hoped foundation hospitals might be, but for something that might be to the detriment of patient care—we will not give them our support.

The hon. Gentleman says that the Government's proposals are timid. Does that mean that the Conservative preference is for NHS foundation trusts that leave the NHS?

No. I shall give details later of exactly what we want to see. We were very much in favour of what we saw when we looked at foundation trusts in other countries; it is sad that the arrangements in those countries, which have worked so well, have been so badly nobbled by the Chancellor and the Treasury.

The section of the Conservative policy consultation document, "Setting the NHS Free" that deals with foundation hospitals states:

"Where Labour breaks new ground in this area, they will receive our support."
Why is that?

If the Secretary of State were to make structural changes that might make the implementation of Conservative policy easier, I would welcome those changes. I find it sad, however, that rules and regulations that might accompany such organisational change will move in exactly the opposite direction from that favoured by Conservative policy.

On 10 April, I asked the Government about potential privatisation plans. I said—[Interruption.]

This is the usual behaviour when the Government do not want to hear things. The Chief Secretary to the Treasury in particular should listen to what I am about to quote.

When, on 10 April, I asked the Government about potential privatisation plans, I said:
"I should like to tell the Government about privatisation. The involvement of the private sector is important. We must set the parameters for future partnerships we will need between tax-funding and personal contributions … We should he opening up health care … to a mixed economy … and be willing to experiment with new forms of co-payment in the public sector."—[Official Report, 10 April 2003; Vol. 403, c. 494.]
The Chief Secretary to the Treasury, who is now in his place, immediately shouted, "That sounds like charges." Sadly, I had to agree that it did sound like charging, but they were not my words. They were the words that the Prime Minister used in his February 2003 lecture entitled, "Where the Third Way Goes from Here". The Opposition have not discussed co-payment in relation to the public services. The Prime Minister has very specifically introduced the idea in relation to those services.

My right hon. Friend the Secretary of State mentioned the cancer specialist Professor David Kerr. He told me last week that, despite the progress made with the NHS cancer plan, it can still take between four and six months in some hospitals for a patient with a cancer who has been referred by a GP to get to the point of treatment. A similar patient in an American hospital could go through the patient journey, to use the modern jargon, in four to six days. Professor Kerr told me that he needs the changes in this Bill to allow hospitals to reorganise their cancer services to meet the better standards. Why are the Opposition standing in the way of consultants such as David Kerr, who want to drive up standards?

I suggest that, for every consultant in favour of foundation hospitals, the hon. Gentleman will find many who oppose them, but he makes an interesting point. If he is suggesting that foundation hospitals move in the direction of the American health care system and the benefits that it brings, that is an interesting point of view. I think that he will find that his views are in stark contrast to some of the remarks made by the Chancellor of the Exchequer.

Sadly, the Chancellor of the Exchequer cannot be with us today. Cocooned in his time warp, he opposes what he considers to be dangerous ideological ideas, and the Prime Minister has neither the courage to remove him nor the strength to face him down. The Chancellor, either directly or indirectly, has sought to rubbish any reforming ideology before systematically emasculating any specific policy proposals.

The gap between the Prime Minister and the Chancellor is very clear. I shall give the House the best example of that. In his speech to the Social Market Foundation in February, the Chancellor said that, in health,
"not only is the consumer not sovereign, but a free market in health care will not produce the most efficient price for its services or a fair deal for its consumer."
The Prime Minister said in his speech to South Camden college that choice mechanisms
"enhance equity by exerting pressure on low-quality or incompetent providers. Competitive pressures and incentives drive up quality, efficiency and responsiveness in the public sector."
Both views cannot be correct at the same time. It was into that heady and toxic mix, the battle for the soul of and—perhaps more importantly—the succession in new Labour, that the idea of foundation hospitals was introduced.

Our view on competition and markets is, of course, much closer to that of the Prime Minister. That is because his view is far closer to ours than it is to that of his own Chancellor of the Exchequer. The Opposition have always been supportive of the concept of foundation hospitals as developed in Spain and Sweden, for example. We have visited those countries to look at the foundation hospitals. An incoming Conservative Government would be comfortable with the models developed there, but we do not see them as an end in themselves. Such hospitals would be among the building blocks that we would use to create a more diverse provision of health care that was increasingly independent of state control.

It is therefore sad to see the emasculated version of foundation hospitals presented in the Bill.

Will my hon. Friend tell the House which extra freedoms he thinks that foundation hospitals should enjoy, compared with the garbled model presented by the Government? That may calm Labour Members' impatience, as I think that they have not yet grasped his argument.

My right hon. Friend should know that we can explain the matter to Labour Members, but that we cannot understand it for them.