I am delighted to have secured this debate on the important subject of applications determining whether businesses can establish pharmacies. I start by thanking the Minister, who over the past few weeks has been extremely helpful in meetings and conversations and in looking into the problems that I have raised with her. I am grateful for her attitude and the co-operation and help that she has given me.
There is a problem up and down the country. There is certainly a problem in my constituency, and I do not think that it is unique. Constituencies up and down the country have a first-class network of pharmacies. They are mostly small pharmacies and many of them are family-owned and family-run businesses that have blended well with the larger contemporary high-street pharmacies such as Boots. My constituents and others know the pharmacist in their local area. They are familiar with the business, and the people serving in the pharmacy know their customers and can give them personal advice and help, not only when they go there to have their prescriptions fulfilled but when they are buying other medication over the counter. A pharmacy is a vital part of a local community.
Until recently, if any business, be it large or small, wished to open another pharmacy in an area, the criteria that had to be considered before a decision was taken on an application included whether it was necessary and whether it was desirable. Unfortunately, the National Health Service (Pharmaceutical Services) Regulations 2005 changed that level playing field, regardless of whether a small or large operator was making the application.
Let me refer to regulation 13. For obvious reasons, this will apply mostly to larger operators—supermarkets, Boots and so on. Under regulation 13, provided that applicants fill in the application form 100 per cent. accurately and completely and provided that they promise to open for 100 hours a week, the primary care trusts have no power other than to approve the application, regardless of whether that is necessary or desirable. The hands of the PCTs are tied.
Ironically, when an application is submitted, there is a 45-day consultation process whereby members of the public and other interested parties can make their views on an application known. The downside is that the consultation process is utterly meaningless, because 100 per cent. of the responses could be against the granting of an application by, for example, a large supermarket, but the PCT would in no circumstances be able to refuse the application, provided that it met the criteria that the form had been accurately and completely filled in and the applicant was promising that the pharmacy would be open for 100 hours a week.
That is unfair. It creates an unfair, unlevel playing field for considering applications. I do not want to distort a market. One should not automatically say on every occasion that pharmacy services should be provided only by a small outlet. In certain circumstances, there is a role for supermarkets to provide pharmacy services, but let the decision-making process for the applications take place on a level playing field where everyone has to compete in the same conditions without the system being loaded in favour of the big operators, which, for a variety of reasons, can promise 100-hour opening.
The reason that I raise this issue is that there are two particular problems in my constituency. There is a problem involving the small family-run Waldman pharmacy in Chelmer village, next-door to Asda the supermarket—its front door is 50 ft away from the entrance to Asda. Ironically, Asda owns the property that the family run their business from and is their landlord. They have been providing the local Chelmer village community with pharmaceutical services for the past 25 years. They are well known and well liked in the local community, and they provide a first-class service. They know their customers and they can give advice as well as fulfilling the prescriptions presented to them.
In almost 21 years as a Member of Parliament, I have never had a single letter from anyone in my constituency complaining that they have not been able to obtain prescription drugs or non-prescription drugs in Chelmsford out of hours. That is because the pharmacies have a system in Chelmsford: they will be open on a Sunday and late in the evenings to meet the needs of the local population. No one has complained to me about the current situation, but Asda has made an application to open a pharmacy on its site, with 100 hours being promised. If that application is granted, it will almost certainly put out of business the family-run pharmacy next-door, for no other reason than that the application has been granted on an unlevel playing field and a small pharmacy cannot compete in the same way as a large supermarket. That is unfair.
If there were a series of complaints about the service that the pharmacy provided, it would be justifiable to say, “Let’s look at what’s going on and see whether there’s a way to improve the current system and the service being provided, or perhaps we will have to change the supplier,” but there never has been a complaint. People are happy with the service that they receive. For that reason, what is happening seems unfair.
It now emerges that, further round the northern arch of my constituency, in the town of Chelmsford, the Pharmacy, in Clematis Tye in Springfield, faces a threat from Sainsbury’s, which is located in that part of the town and is making its third application, under regulation 13, with a promise of 100 hours of pharmacy opening time. That small community pharmacy will be put out of business if the application is granted. Again, that is wrong. We are talking about ruining the livelihoods of individuals who are very dedicated and have worked extremely hard, in the public interest, to provide a first-class service that is welcomed by customers and the local community that they serve. They will be put out of business at a stroke simply because of the bulk-buying and market power of a large faceless supermarket.
In addition, the supermarkets will not be able to build up the same relationship with their customers, because of the sheer nature of their business. Their business is determined by turnover and getting customers in and out swiftly, while ensuring that they buy the maximum amount of goods. Why are they putting in a pharmacy service? I am not sure that their wanting to provide prescription and non-prescription drugs for their customers is totally altruistic—of course, supermarkets already provide a range of non-prescription drugs. The motive is to get more people into their premises so that when they come in to change their prescriptions they will almost certainly, on the law of averages, purchase foods and other goods, which will increase and enhance the supermarkets’ ability to make a larger profit. My argument is that such a change is not necessary and not in the interests of the local communities.
I also have one or two problems with what happens when the applications are granted. I understand that Penny Beck of Tesco recently came to the House to address an all-party group. She said that many supermarkets were putting in applications for pharmacies on the basis of the 100-hour rule because they felt that it was a dead cert that they would be successful if they completed the forms accurately. However, once the supermarkets are successful in their application, they then seek to reduce the commitment that they have given to open for 100 hours and try to change the terms and conditions to 80 hours or 60 hours. I can see one of the Minister’s officials looking rather sceptical. I do not want to cross swords with them because they are far more knowledgeable than I am. Perhaps I could give them some evidence of where this is happening to substantiate my case.
I understand that Sainsbury’s in Chafford Hundred in southern Essex has had a 100-hour application granted, and it has not delivered on those hours. It is not a question of seeking to get the terms changed; it has just not delivered the 100 hours even though the application was granted solely on that basis. Will the Minister tell me what action she, the Department of Health or the local PCT will take against those supermarkets or applicants that make an application on such a false pretence?
In south Essex, another pharmacy has been granted an application for a 100-hour pharmacy, but it is trying to reduce the conditions to 40 hours. If applications based on 100 hours are granted in good faith, and small pharmacies in the immediate area have been put out of business, it is a bit rich for the applicant to try to reduce the hours they have to open to 40, which is what the small pharmacies were already doing. We cannot then bring back the small pharmacies that have gone out of business. Will the Minister tell us what action can be taken against pharmacies that have been granted an application based on 100 hours but are not keeping to those hours, and how we can stop larger applicants, which have been granted an application solely on the commitment of 100 hours, from reducing their hours?
At some point in the not-too-distant future, the Government will publish a White Paper on pharmacy services. I have heard on the grapevine that the publication date is tomorrow. I do not know whether that is true, and I do not know whether the Minister is in a position to confirm it. However, when that White Paper is published, I hope that it contains some recommendations on the system of applications for running a pharmacy service. I assume, as is normal with many White Papers, that the Government will have a view about the direction that they want to take, but they may want a consultation process to hear other people’s ideas.
If the Government accept my argument that there is something inherently unfair with the existing system and agree to change it and redress the imbalance between the larger and smaller providers, would the Minister be prepared to suspend the 2005 rules until she has made the necessary changes? That would save a number of pharmacies—not least the two in my constituency. They might be caught up in a situation in which the Government were minded to make the system fairer but were unable to make the changes for some time because of other parliamentary business—unless the Government used secondary legislation. It would be tragic if the smaller pharmacies then went out of business knowing that help was on the way, but time was not in their favour.
For those reasons, I hope that the Government will accept that the situation is unfair, and that it is morally wrong to weight a system in such a way that it affects people’s livelihoods and businesses. I hope that the Minister will do something to help the smaller pharmacies that have played such a vital role within our local communities. In the majority of cases, they have provided a first-class service. Customers are, by and large, happy with the personal service that they receive and do not want it replaced by a highly impersonal service from a larger provider that, in other areas of the retail sector, is taking over more and more of our small shops and high streets.
May I congratulate the hon. Member for West Chelmsford (Mr. Burns) on securing this debate? I know that this is a matter that has caused him great concern and he has again highlighted the main issues that he seeks to bring to my attention and the attention of the House. I am also aware from the Department’s postbag that other hon. Members from other parts of the country share his concerns. I will briefly outline the current position and respond to the points that the hon. Gentleman has raised.
As I am sure that the hon. Gentleman will agree, pharmacies are businesses, and the Department of Health did not address the question of fairness of competition. To give some background, in 2003, a report from the Office of Fair Trading recommended total deregulation of the retail pharmacy services in the United Kingdom, with the abolition of the regulatory restrictions on NHS pharmacy applications, known as the controlled entry. The Government responded to that substantial report, which called for total deregulation, with a cautious move in the directions recommended, but announced a balanced package of reforms for England in July 2003. They recognised many of the points that the hon. Gentleman has raised and stopped quite a long way short of the original recommendations. The measures were largely introduced from April 2005. The hon. Gentleman has again asked me—as he has in private—whether I have the power to suspend the 2005 regulations. I have to tell him that a simple suspension is beyond my powers.
The reforms had a number of aims. They were designed to open up the NHS pharmacy market to greater contestability to improve patient choice and access to pharmacy-led services and to drive up the quality of the services in tandem with the new contractual framework for community pharmacy. The hon. Gentleman would accept all those principles.
The reforms included four specific exemptions to the controlled entry system, one of which was for pharmacies prepared to open for at least 100 hours a week. When introducing those reforms, the Department made it clear that pharmacies that benefited from those new regulatory freedoms would also have to meet obligations and safeguards. The hon. Gentleman touched on that point, and I want to answer him.
Pharmacies that commit themselves to opening more than 100 hours a week must stick to that commitment. They must also agree to provide the services that the PCTs require them to provide locally—for instance, helping people to stop smoking, or providing emergency hormonal contraception. We have also ensured that PCTs have the power to remove contractors from their pharmaceutical list that consistently fail to meet those terms with no good reason.
The hon. Gentleman asked me for information about those pharmacies that, in his view, do not stick to their commitment. They will be monitored by the PCT, which will require regular returns on opening hours, monitor complaints and take action under the regulations to impose further conditions. Ultimately, notice of removal to a contractor can be given; if default occurs, it can be removed from the list.
The hon. Gentleman also asked whether companies that committed themselves to 100 hours were automatically given agreement. It is not automatic; in the two years since March 2007 about one fifth of applications for 100-hour pharmacies have been refused by the PCT or withdrawn. I know that the hon. Gentleman’s PCT will be considering the application that concerns him at its May meeting. He may want to make further representations on the issue. The PCTs have the necessary powers.
The Minister said that PCTs have the powers necessary to refuse an application. I have had meetings with the Mid Essex PCT, and I am assured that if the form is completed 100 per cent. correctly and a commitment given to opening for 100 hours, its hands are tied. On what other grounds can it refuse an application?
It is difficult for me to deal with that specific application, as I have not seen the details. However, I am happy to go back further with my officials to find out; we have that option before May. I make two points. First, there is the power to refuse applications. Secondly, there is the power to monitor for a failure to deliver; if necessary, that can result in the removal of the agreed contract.
On the second point, the removal of the contract would be too late. If the application was granted and the small pharmacy went out of business, it would no longer be in business. On the first point, I would be extremely grateful if the Minister were to let me know as soon as possible on what grounds Mid Essex PCT might be able to refuse an application. I would be pleased to pass on that information.
I undertake to get that information to the hon. Gentleman.
I know that the hon. Gentleman is committed to patient choice, so I remind him that the Department undertook a complete review, which was published in January 2007. It specifically considered patient choice. With respect, I say gently to the hon. Gentleman that, if the pharmacy of the patient’s choice was providing all the services, the patient could continue to use it regardless of whether a 100-hour service was provided nearby. That is certainly my personal practice when using a pharmacy; I use the local community pharmacy in return for services that I value.
There was no evidence of a detrimental impact on access to pharmaceutical services. I remind the hon. Gentleman that we are talking about what is legitimate for businesses in competition. None the less, the service is valuable and it is important to take matters forward. The review of the 100-hour pharmacy contract showed that through their extended opening hours they can and do make an important contribution to expanding access to NHS services. They are certainly popular with patients, as is the community pharmacy.
The national data produced by the NHS information centre show that pharmacies exempt from the control of entry requirements provide proportionately more locally commissioned services, such as the minor ailment schemes, nicotine replacement therapy and emergency hormonal contraception, than existing pharmacies. I agree with the hon. Gentleman’s focus on those issues with regard to pharmacies that are already flourishing, but such pharmacies should not need to worry.
However, our report also drew attention to some drawbacks. The impact of the reforms was found to be uneven, with pockets of greatest activity in certain parts of the country. The NHS found the new system difficult to administer, and exempt applications sometimes hampered their efforts to plan strategically and to commission more clinical services. As the hon. Gentleman eloquently said, business reaction was mixed, with many being concerned about the operation of the exemptions and the 100-hour provision alongside community pharmacies.
I said earlier and in previous weeks that the application that the hon. Gentleman raises today is to be decided by the PCT’s pharmaceutical services committee at its May meeting. If the application were to be approved—it can be approved only if the PCT thinks that the specified services will be provided—there will be up to nine months before the pharmacy opens and the monitoring process starts.
I assure the hon. Gentleman that we are continuing to keep the provision under scrutiny. It is popular, and it can increase access to services both generally and out of hours. Despite his eloquent arguments, there is insufficient evidence to support the withdrawal or amendment of the exemption. However, I have listened closely to what he had to say. Although I cannot tell him what is in the White Paper—it will be published tomorrow—I can say that the strength of feeling that he expressed today will be noted. The White Paper will touch on some of those issues, and the debate about the benefits and the drawbacks will continue, so that we can find a sensible solution. I hope, in time, to deal with the issues raised by the hon. Gentleman in relation to his local pharmacy.