House of Commons
Tuesday 1 April 2014
The House met at half-past Eleven o’clock
[Mr Speaker in the Chair]
business before questions
Transport for London Bill [Lords]
Second Reading opposed and deferred until Tuesday 8 April (Standing Order No. 20).
Oral Answers to Questions
The Secretary of State was asked—
The Government have made it a key priority to restore a culture of compassionate care throughout our NHS. Ten thousand nurses and midwives will have taken part in a new leadership programme that champions patient-focused compassionate care. Pilots are testing whether all nurses should spend time on the wards prior to a nursing degree.
Will the Secretary of State join me in congratulating NHS staff, who are shifting the priorities of the NHS culture towards compassionate care and away from a tick-box culture? Does he agree with Robert Francis, who says that compassionate care very often saves money?
My hon. Friend is absolutely right. Last week I was in one of the safest hospitals in the world, Virginia Mason hospital in Seattle, which has cut litigation claims by three quarters since it introduced safer care. We have fantastic hospitals in this country too, such as Salford Royal. The truth is that safer care is better value for money: it means that more money can be spent on the front line, not on litigation.
The Secretary of State is not showing much compassion towards hard-working NHS staff, who have a 1% pay rise. One year on from the top-down reforms, what does he think of the survey showing that 69% of front-line staff think his reforms are damaging patient care?
The most damaging thing for patient care would be a pay award, which the hon. Gentleman sounds like his is supporting, that would mean the potential loss of 6,000 nursing jobs from our front line. That would be incredibly bad for patients and incredibly bad for nurses. All nurses are getting a minimum 1% rise. That is the right thing to do. That is supported by the shadow Chancellor but not, apparently, by the shadow Health Secretary.
20. In a report published by the King’s Fund last month, South Warwickshire NHS Foundation Trust was highlighted as a leading example of compassionate care for the frail elderly. Will the Secretary of State join me in congratulating the trust’s staff on the move away from tick-box targets, and visit the trust to see this new emergency care model in practice? (903439)
I much enjoyed a recent dinner where I had the chance to meet a consultant from South Warwickshire NHS Foundation Trust. One of the discussions I remember having with him was how inside the NHS the definition of success for a hospital was in the past too narrowly focused on targets and financial balance, and not enough on patient safety, compassionate care and clinical outcomes. He, and many other people in the NHS, welcome the change that this Government have made in the past year to change that balance.
Does the Secretary of State agree that compassionate care begins with being able to see a GP? In areas such as mine, GP appointments are increasingly hard to get. In fact, one practice has had its contract rescinded because of its failures. Does he now regret scrapping the target allowing patients to see a GP within 48 hours?
I am interested and rather astonished that the hon. Lady dares to mention the words “GP” and “contract” in the same sentence. It was Labour’s GP contract changes in 2004 that made it disastrously more difficult for people to see their GP and destroyed the link between patients and doctors by getting rid of named GPs. She will be pleased to know that from today we are reintroducing named GPs for the over-75s, which is big step forward in making it easier for people to see their GP.
Although the Secretary of State says that he is getting rid of tick-box targets, new targets are being introduced, including hourly ward rounding for nurses and the introduction of a requirement for nurses to undertake a year as a care assistant. Would it not be better to depend on the professionalism of the nursing profession?
That is exactly what we are doing. There is no target to introduce hourly rounding, but there is very good evidence from the hospitals that have it, such as Salford Royal, that it results in the buzzer going off less often, calmer wards and problems being nipped in the bud. People are given food and water before they feel the need to ask for it and we end up with much better and safer care. That is something the hon. Gentleman should welcome. We certainly want to work with the nursing profession to ensure we deliver that.
According to official figures, the new structure set up by the Health and Social Care Act 2012 will save £5.5 billion in this Parliament and £1.5 billion every year after that, all of which will be reinvested in front-line care.
Given that he promised in 2010 that there would be no top-down reorganisation of the NHS, how can the Secretary of State justify spending billions of pounds on top-down reorganisation on the day on which Simon Stevens, the new chief executive of NHS England, has warned that the NHS is facing the biggest
“budget crunch in its 66-year history”?
As Simon Stevens is starting today, I think that this is a good moment to welcome him to his post. He is an outstanding individual, and I know that we all wish him well in what will be a challenging but incredibly important job.
As for the reorganisation, the official figures make it clear that it is saving more than £1 billion every year during the present Parliament—money that is being reinvested in the provision of 1,600 more nurses, 1,700 more midwives, 1,800 more health visitors and nearly 8,000 more doctors than we had under Labour. I am afraid that that shows that Labour has not learned the lessons of Mid Staffs. Labour Members still want to turn the clock back and spend all that money on administration.
Does my right hon. Friend agree that savings that have been made through greater effectiveness and efficiency, and that can be ploughed back into patient care, should be warmly welcomed? Does he not think that such action is far preferable to the bizarre suggestion by a former Labour Health Minister that people should be charged £10 a month to visit their GPs, which would compromise Nye Bevan’s founding principle of a free health service?
I do think that that is a bizarre suggestion. Given our ageing population, we need to make it easier rather than harder for people to see their GPs. I also think it bizarre of the Opposition to set their face against the reforms that my right hon. Friend helped to pilot through the House. Because money has gone to the front line, 800,000 more operations are being performed in the NHS year in, year out than were performed under Labour. We are putting money where it is needed, with doctors and nurses.
I will happily give the hon. Gentleman the figures, but if he is shocked by the amount that was spent on consultancy, he will be even more horrified to learn that it was vastly greater under the last Labour Government. We are paring that down precisely because we want money to be spent on the front line.
Does the Secretary of State share my hope that the Government’s joint commitment to increasing NHS spending and dealing with the legacy of private finance initiative debt will help areas such as Gosport, which is living under the umbrella of a huge PFI hospital that was approved under the last Government and is sucking up most of the NHS budget?
PFI debt is costing the NHS more than £1 billion every year. In some cases that money was well spent, but it was often very poorly spent. My hon. Friend is absolutely right: we want the money to be spent on front-line care, which is why we have drawn a line under the appalling deals negotiated by the last Government. We are spending money where it should be spent, in order to help patients.
It is a year to the day since the Government’s reorganisation took effect, and now that the dust has settled, we can see the full scale of its folly. There are 163 more NHS organisations than there were before, four times more managers are being paid the very highest salaries than the Government planned for, and 4,000 staff received redundancy payments only to be rehired by the new organisations that the Government had created. Is not the reason why the NHS is the only public service that cannot honour a 1% pay increase for its hard-working staff the fact that these Ministers lost control of their own reorganisation, and it has now wasted billions of pounds?
I think that the right hon. Gentleman needs to look at the figures. The reorganisation, which he opposed through thick and thin, means that the NHS is spending less on administration and bureaucracy. If he questions that, may I ask how he thinks we found the money to pay for 8,000 more doctors and 15,000 more clinicians, if it was not by getting rid of primary care trusts and strategic health authorities? That is why there are now 2.5 million more diagnostic tests and 4 million more out-patient appointments every year. We are doing more for patients than was ever done when the right hon. Gentleman was Secretary of State.
I know that it is April fool’s day, and the Secretary of State certainly seems to be getting into the spirit of it with that answer, but his fantasy figures will be laughed at by anyone who works in the NHS. It is not just in relation to bureaucracy that the Government have broken promises. They said that the reorganisation would improve patient care, but 70% of NHS staff say that it has got worse. The first full year of the reorganised NHS has been the worst year for a decade in A and E. It is harder to get a GP appointment than it was before, and cancer patients are waiting longer to start treatment. Is it not now clear that the Government’s reorganisation has been a disaster on every level for patients and taxpayers who never voted for it, and who were promised that it would never happen?
I will tell the right hon. Gentleman what is not an April fool—the appalling care at Mid Staffs on his watch. If he is talking about how the NHS is doing, perhaps, for once, Labour Members should look at what patients are saying. I know that it is difficult, but if we look at what patients say, we see that since the election, there has been a 5% increase in those who think that their NHS care is safe, and a 10% increase in those who think that they will be treated with dignity and respect in the NHS under the coalition. We are proud of that, because we are putting patients before politics, which the right hon. Gentleman never does.
NHS Staff (Redundancy and Re-employment)
Since May 2010 and up to December 2013, 4,050 staff across the whole NHS have been re-employed in the NHS following redundancy. This covers all staff grades, not just managers, and is a tiny proportion of the total NHS work force of currently around 1.2 million.
May I thank the Minister for that utterly complacent answer? Is it not outrageous that, while front-line health service staff are having their salaries frozen, the fat cats at the top are getting monstrous pay-outs and then being re-employed straight away elsewhere in the NHS?
The Opposition will have to do better than these prepared questions. We have been lumbered with their redundancy terms, which were negotiated when the right hon. Member for Leigh (Andy Burnham) was a Minister in the Department of Health.
On NHS pay, we believe in having enough front-line staff to care for patients. That is the lesson of Mid Staffs. What the previous Government would have done—and the Opposition would have us do—is give some staff in the NHS two pay rises, not just one. That is unacceptable. We need to have enough staff to ensure that we can look after patients. All staff in the NHS will receive a pay rise of at least 1%, but unfortunately, because of the terms that the previous Government set, some managers are still treated better than patients. We will change that.
I think this is an own goal from the Opposition. They set the redundancy terms in 2006, when the shadow Secretary of State was a Minister in the Department, which have allowed extraordinary, eye-watering redundancy payments to be made, particularly to managers. That is to the disadvantage of front-line staff and patients. It is why we are currently in negotiations with the unions to ensure that we improve redundancy terms, stop those eye-watering payments and have more money to care for front-line patients.
21. Talking of eye-watering payments, may I refer to the six-figure pay-off of £300,000 reportedly paid to Jo-Anne Wass, one of the 10 highest earners in the NHS? Despite the fact that she is leaving this month, the NHS is said to be paying for a two-year secondment for her, even though she will not return. How many 1% pay rises for nurses could be found out of that £300,000? (903441)
These are questions that the Opposition should have thought about—the hon. Lady was a Minister in the previous Government—when they negotiated the redundancy terms. They are Labour’s redundancy terms, which we are changing. When we look at the figures, under the previous Government’s NHS reorganisation in 2006 to 2008, we see that the NHS spent more than £360 million on redundancy and early retirement alone, which compares with only half that—£178 million from 2011 to 2013—under the current Government. How much more money would have been available for staff pay had the previous Government got that right?
We receive a number of representations about community pharmacies over any period. Of course, they play a vital role in their local area, providing high-quality care and support and improving people’s health, especially in hard-to-reach communities. For example, more than 5,000 pharmacies assist with smoking cessation work.
I thank the Minister for her reply. With GPs managing demands on their time by operating longer waiting lists for appointments, to the increasing frustration of my constituents, is it not time for a more radical change in the role of community pharmacists in primary care? Does the Minister agree that any proposals to reorganise health services in Greater Manchester should fully explore the contribution that pharmacists can make—for example, in supporting people with long-term conditions or prescribing for minor conditions?
The hon. Lady is right to say that pharmacists have a great role to play, and she has given a good example of their helping people to manage long-term conditions and helping people with their medication. NHS England’s community pharmacy call to action has stimulated the debate about where community pharmacies should sit. We see them as a vital part of front-line services, and I am glad that the NHS is looking at their role in the round, because it is a really important one.
I have received no specific representations on that matter, but my hon. Friend will know that we have taken measures to ban the sale of e-cigarettes to under-18s. He will also know that, as we transpose the new tobacco directive into our country’s law, there will be opportunities to bear down on some of the advertising and on the ways in which e-cigarettes are placed, about which we have some concerns. We recognise that e-cigs can be a way for some people to quit smoking, but we also recognise the concern that they could be a gateway into smoking for young people.
Does the Minister agree that one way in which community pharmacies can play a larger role in the NHS is in the provision of testing for, and raising awareness of, diabetes? Has she received any representations on that matter? Let us get diabetes testing on to the high street.
I think that I received a representation from the right hon. Gentleman in person when he was kind enough to visit my constituency with the Silver Star diabetes charity that he founded. That visit perfectly demonstrated the role of testing in the community; it was fantastic to see people queuing up to be tested in a day-to-day setting outside a supermarket. He is quite right to say that community pharmacies have a big role to play. I recently visited Tesco to learn about its work with Diabetes UK, and about the many tens of thousands of people that those two organisations, working together, have tested.
Does the Minister recognise that not only pharmacists but—here I declare a professional interest—optometrists represent a huge reservoir of underused professional skill and expertise in an unrivalled network of premises? Can we not find ways of using that expertise more effectively in primary care, diagnostics and—as the right hon. Member for Leicester East (Keith Vaz) suggests—screening?
I echo my previous point that all our front-line health care services have a role to play in the community in helping people to keep well, to stay out of acute care and to manage their medicine. Indeed, the NHS is looking at this question more widely, and I understand that the central message of Simon Stevens’s speech today is that we need to look in the round at the way in which all our front-line services work together to deliver great care in the community.
Under the new GP contract, which starts today, we will ensure progressively that everyone over the age of 75 has a named GP responsible for delivering proactive care for our most vulnerable older citizens. The new contract will help to restore the personal relationship between doctor and patient that was destroyed in 2004 when named GPs were abolished.
Will my right hon. Friend congratulate Worcestershire Acute Hospitals NHS Trust, which has used some of its winter pressure money this year to buy beds in a nursing home in order to free up much-needed hospital beds? Does he agree that that model enables elderly people to be cared for in their community when they no longer need urgent treatment?
I am happy to congratulate the trust on its excellent work. It is worth reflecting on how well the NHS did this winter. Despite constant attempts by the Opposition to talk up a crisis, we hit the target for A and E in more weeks than was the case when the right hon. Member for Leigh (Andy Burnham) was in office, and 2,000 additional people were seen within four hours every single day.
Part of the problem with people being admitted and readmitted to hospitals involves access to their GPs. What is the Secretary of State doing to ensure that elderly people across the board have access to their GP, so as to prevent their admission or readmission to hospital?
The hon. Gentleman is absolutely right. If we are going to deal with the pressures in A and E, we need to have a massive improvement in primary care access. There has been historical under-investment in primary care, going back over many years, and we need to change that. One of the ways in which we want to do that is to reintroduce GPs taking personal responsibility for the most vulnerable older people, and today’s changes will help us to move towards that.
In my constituency the success of virtual wards has decreased the need for hospital beds. That is welcome, but dementia sufferers, who sometimes need hospital treatment and specialist care to mitigate the additional confusion and anxiety that they experience, do need specialist care within a hospital. Our local dementia unit is under threat of closure. Does the Secretary of State agree that it should not be closed and that that is a wrong decision?
I do not know the details of that particular case, but I am happy to look into it. I would say that a quarter of our hospital in-patients have dementia, and it is incredibly important that hospitals continue with a revolution in the way they look after people with dementia. There are some fantastic examples of that around the country, and I want to give them every support and encouragement.
GP access is a crucial element of out-of-hospital care, and the British Medical Association today said that the damage caused by this Government to the NHS has been “profound and intense”. Last week, the Royal College of General Practitioners said that more than a quarter of us now wait more than a week for an appointment with our family doctor. Within days of taking office, Ministers axed Labour’s guarantee of an appointment within 48 hours and took away the funding for evening and weekend opening. Under this Government, has it not got harder and harder to get an appointment with a GP? Let us have an honest, grown-up answer.
The honest factual answer is that we got rid of that target because when it was in place the number of people actually being able to see their GP within 48 hours was falling, so it was not working. I am afraid that this is the same old Labour problem: thinking that the solution to every problem in the NHS is another target. That is exactly what led to Mid Staffs and exactly what we will not allow to happen.
Brain Tumours (Children)
We have committed £450 million to enable earlier diagnosis of cancer, including direct GP access to MRI scans for suspected brain tumours. We have also funded a BMJ learning module for GPs on diagnosing brain tumours in children. Of course, I have also met my hon. Friend to discuss this issue, and I am planning to attend the all-party group on brain tumours very shortly.
May I thank the Minister for her answer, and welcome her decision to write to local health boards, and Public Health England’s decision to write to heads of public health, to promote the delivery of the HeadSmart campaign’s brain tumour symptom awareness cards via schools? That gives us a shot of cutting the diagnosis delay in children to five weeks. Will she join me in urging councils to deliver the cards? This will not cost the taxpayer a penny, but it will save hundreds of lives.
I would like to thank all the organisations behind the excellent HeadSmart campaign for their amazing work. To mark the first anniversary of the new public health arrangements, I am planning to write to local health and wellbeing boards to make them aware of the issues of particular interest to Parliament, and this is one that I intend to highlight. Public Health England has also agreed to contact all directors of public health. We fully support the HeadSmart campaign’s aims and encourage local bodies to help drive improvements in this crucial area of care.
My constituent Raj Rana, who is now four, is a survivor of a brain tumour. One group that really can assist in this area is schools. Will the Minister talk to the Department for Education about how they can become alert to early symptoms of brain tumours?
A and E Waiting Times
Despite 1.2 million more A and E attendances in England, nearly 96% of patients have been seen, treated, transferred and discharged within four hours of arrival at A and E. That excellent level of service is a credit to the hard work of front-line NHS staff across the whole NHS, and I am sure the whole House would want to thank them for that.
I am disappointed that the Minister has not bothered to answer the question. I will answer it for her: nearly 1 million patients have had to wait for longer than four hours in A and E over the past 12 months —it is one of the worst figures in a decade. Will she and her Government get a grip and sort this out?
I did answer the question—I told the hon. Lady exactly how the NHS was performing. I have to say that Government Members slightly despair at the constant churlishness of Opposition Members who try to talk down the NHS and talk up a crisis. They are trying to talk the situation into fitting the rhetoric, but the NHS has performed really well this winter and many more people have been seen within the target. The average waiting time for someone to be seen is actually 30 minutes. The NHS has done well and she should join us in congratulating it on that.
Does my hon. Friend agree that one of the ways to reduce pressures on A and E is to ensure that people do not go to A and E if they do not need to? Will she compliment the Oxford clinical commissioning group for the work that it is doing in Abingdon and is about to do in Banbury in setting up a primary triage unit at the entrance of A and E to ensure that those who need primary care get it, and that those who do not require A and E care get the proper and appropriate care?
I congratulate my right hon. Friend’s local CCG. Increasingly, I am seeing, right across the country, imaginative and innovative ways in which people, local clinicians, public health professionals and people in wider health services are looking at how we keep people who do not need to go to A and E out of A and E. Some of them are doing remarkable work. We will be celebrating that this week by recognising some of those unsung heroes who are doing that great public health work in our communities.
I responded to a debate on that issue a few months ago. As the hon. Lady knows, there are no plans for what she suggests, but the local trust has begun a process, in which she and other local politicians are engaged. At the heart of that process is care for local people, looking at what is clinically best for them and what the best outcomes are for them in the long term. That will have regard to Sir Bruce Keogh’s review of urgent care. What we want are the best outcomes for people, and I am sure that that is what she wants too.
Every weekend, as a first responder volunteer in the NHS, I see too many people taken off to hospital unnecessarily. One way of addressing that is to have a proper strategy for community paramedicine. We have had a trial running in Goole, which the Secretary of State has seen, where an emergency care practitioner delivers care in people’s homes, thereby reducing visits to hospital. Do we not need a national strategy on community paramedicine?
I know of my hon. Friend’s extraordinary work as a first responder, and we all greatly admire it. He makes another great point about how we tackle this long-term challenge of the sustainability of our acute services. I am happy to draw his comments to the attention of NHS England. I am sure that it is one part of all the things it is looking at as it addresses this issue.
The complacency of this Minister knows no bounds. In 2011, the Prime Minister said:
“I refuse to go back to the days when people had to wait for hours on end to be seen in A and E.”
In 2013-14, the first year after the Government’s reorganisation, we saw the worst year in A and E for a decade, with almost 1 million people waiting longer than four hours to be seen in accident and emergency. As A and E is the barometer of the whole health and care system, is this not the clearest sign that the NHS is getting worse on their watch?
So desperate are the Opposition, I think the shadow Minister actually used the same opening line that he used at the last Health orals. It really is time to change the script. The NHS has seen more people in A and E than ever before. Waiting times have halved since the last Government left office. If he wants to come to the Dispatch Box and highlight problems in A and E, why does he not try the 86.6% of people being seen in Wales, which is a truly shocking performance statistic.
Physical and Mental Health (Parity of Esteem)
The mandate to NHS England requires measurable progress in achieving parity of esteem by March 2015. “Closing the Gap”, which was published in January 2014, contains a reinvigorated system-wide drive to deliver parity of esteem and to hold services to account. That includes programmes in NHS England, Public Health England and Health Education England.
If the Minister really believes in parity of esteem, how can he possibly justify cutting the funding for mental health trusts by 20% more than has been the case for other hospitals? Six leading mental health organisations warned that that decision will put lives at risk. Will the Minister now rethink the matter?
It is because I really care about parity of esteem that I described the decision by NHS England as flawed. It cannot be justified. It is not based on evidence. I am pleased to say that since then the former chief executive, David Nicholson, has written to all his area teams to make it very clear that in their commissioning plans and clinical commissioning groups, and in determining contracts with mental health providers, they must apply the principle of parity of esteem. Let us wait to see what emerges from that, but any reduction in funding for mental health this year would be unacceptable.
We know that spending on mental health fell for the first time in a decade in the first year in which this Government were in power. Unfortunately, the Department no longer collects or publishes that data, but Sheffield Mind has expressed its concerns about cuts in the two subsequent years despite referrals rising dramatically. Will the Minister assure the House that he will in future publish figures on spending levels and that mental health services will not be subject to a fourth year of cuts?
We want to make sure that there is complete transparency in the availability of data and to ensure that in future it will be possible to draw those comparisons. I suspect that there is agreement across the House that mental health must not lose out. In the last decade, when the NHS was financially squeezed mental health lost out, as the Health Committee confirmed. It has happened again this time, but I am absolutely determined that we will change the levers to ensure that mental health gets its fair deal. I am delighted to confirm today that we are ending the exclusion of mental health patients from the legal right of choice. It is extraordinary to me that when the Labour Government introduced a legal right of choice in the NHS, they inexplicably left out mental health patients. We are ending that today.
Last week, I hosted a reception in Parliament to celebrate the outstanding work of the West London Centre for Counselling and its tireless support for my constituents with mental health issues, and I thank my hon. Friends the Members for Liverpool, Wavertree (Luciana Berger) and for Copeland (Mr Reed) for attending. Organisations such as the centre are, in the words of Mind, “straining at the seams” because demand so far outstrips resources. Why does not this Minister take responsibility for being in government and do something about mental health being a Cinderella service?
That is precisely what I am seeking to do, but we have to address what I have often described as an institutional bias against mental health in the NHS. For example, when the previous Labour Government introduced a maximum waiting time of 18 weeks, inexplicably, they left out mental health again. What possible justification can there be for that? We are ending that and ensuring that when commissioners determine where funding goes they will have to take into account waiting time standards in mental health for the first time.
I am proud to be a patron of Cool Recovery, a mental health charity in my constituency that provides vital support and information for sufferers and their families. Will the Minister confirm that as we welcome Simon Stevens to his new role, he will not only discuss how parity of esteem is reflected in the overall funding share but make sure that some of that funding can go to the charities that provide that parity?
I will absolutely discuss parity of esteem with Simon Stevens when I meet him very soon and I will ensure that the case for third sector organisations is taken into account, as they play an incredibly important role. I was delighted, incidentally, to be down in the south-west at the signing of the crisis care concordat to ensure that people who are suffering a mental health crisis are treated in the same way as people who are suffering a physical health crisis.
The Minister is absolutely right to talk about the institutional bias and that is why it is absolutely right to introduce choice today and to set access standards for mental health for the first time. Will he go one step further and do something else that the previous Labour Government did not do by introducing the standards that the National Institute for Health and Care Excellence sets for mental health and ensuring that they are must-dos as well?
I very much share my right hon. Friend’s frustration that when a medicine is determined by the National Institute for Care Excellence as an evidence-based intervention, the system has to allow it, but when NICE determines that a procedure should be followed, it is discretionary. We must address that to ensure that we use the money in the most effective, evidence-based way.
Will the Minister have a discussion with his colleagues in the Department for Work and Pensions and the Department for Business, Innovation and Skills to see what more can be done to help patients with mental health issues to get into the workplace and find employment?
My hon. Friend raises an incredibly important point. One thing that I am very proud of is that under this Government 80,000 more people a year are getting access to psychological therapies through the improving access to psychological therapies programme—something we that should be very proud of. We have also done some joint work with the Department for Work and Pensions on how we can link up IAPT much more effectively with Jobcentre Plus to get people back to work, rather than paying them benefits.
The Minister was right to point out that from today people who use mental health services are supposed to be able to choose where they get their treatment. However, the payment mechanisms still are not in place and the guidance has not been issued. Is it not the case that the only choice for many teenagers is whether to be treated on an adult ward or travel hours to the nearest bed? The Health and Social Care Act 2012 was meant to deliver parity of esteem. The Minister is not a commentator or a bystander. I listened to his answers a moment ago. Can he explain what has gone so wrong and how he intends to fix it?
I agree that I am not a bystander. That is why I have acted to introduce choice for mental health patients for the first time—something that the Labour Government completely failed to do. Perhaps the hon. Lady could explain to the House why on earth they would leave out mental health patients from the legal right of choice. It is extraordinary. This Government are taking decisive action to ensure that there is real parity—real equality—in the way that mental health patients are treated.
We have made improving maternity services so that women have a named midwife responsible for ensuring personalised maternity care the key objective in our mandate to NHS England. Since May 2010 the number of full-time equivalent midwives increased by more than 1,500, and over the past two years I have set up a £35 million capital investment fund, which has already seen improvements to more than 100 maternity units.
The Diamond Jubilee maternity unit at the Lister hospital in Stevenage is doing an amazing job for young mums, and the neonatal unit has just won a national award. I will be visiting the staff on Friday to thank them for their hard work. Would the Minister like to record his support for the staff who do such a great job?
I would be happy to do so. I am aware of the positive difference that the Diamond Jubilee unit has made to local maternity services. My hon. Friend will be aware that the East and North Hertfordshire NHS Trust and the unit have received £314,000 of this Government’s capital funding to support the hard-working staff on that unit delivering high-quality care to women.
In 2001 the then Labour Government closed the maternity unit at Crawley hospital, despite a growing birth rate since then in my constituency. The local clinical commissioning group proposes to reintroduce a midwife-led maternity unit. Will my hon. Friend meet me and the CCG to discuss those plans further?
I would be delighted to do so. As my hon. Friend knows, I have a particular knowledge of his local hospital trust. It was a very short-sighted decision by the previous Government to downgrade and effectively close Crawley hospital, given the demographic pressures there. There is a good case for a midwifery-led maternity unit. Under this Government we are seeing the numbers of those increase. I would be happy to meet him to discuss these matters further.
My hon. Friend makes an important point. We were talking earlier about improving parity of esteem between mental and physical health. When we came to power, only 50% of maternity units had specialist perinatal mental health support, and we will make sure, through the mandate to Health Education England, that by 2017 all maternity units have specialist perinatal mental health support. That is something that this Government will be very proud of.
Last December the UK national screening committee advised against offering all pregnant women a routine test for group B streptococcus. The Minister will recall that I asked about this matter in Health questions last time. The issue is not to screen in all cases, but to ensure that the enriched culture medium test is available where clinicians deem it appropriate. Will the Minister look at how that test can be made available whenever it is clinically necessary?
That is a good point. On screening, we have to listen to the advice of the national screening committee, as I am sure hon. Members on both sides of the House would agree, but on the enriched culture medium test, I have had further meetings with Group B Strep Support and with the former editor of the obstetricians and gynaecologists journal, the BJOG. On the back of that meeting I have written to the Royal College of Obstetricians and Gynaecologists to ask it to look at the clinical evidence on that test, and it will take the matter forward.
I thought that answers to questions were improving after 12 noon, but the last answer on post-natal depression was not as good as I expected. We have a campaign on post-natal depression, which is the biggest killer of healthy young women through suicide. The Minister is being complacent. Early diagnosis and good GPs are essential. What is he really doing about that?
The hon. Gentleman is absolutely right. I thought it was disgraceful, when we came to power and inherited the legacy of the previous Government on post-natal depression, that only 50% of maternity units had perinatal mental health support. That was not good enough, and that is why I have ensured that in the mandate to Health Education England, and working with NHS commissioners, all maternity units will have specialist perinatal support by 2017. There is more training going in for the work of the Royal College of General Practitioners on mental health support for GPs in helping women, and we are now increasing the number of health visitors by almost 2,000, and health visitors do a fantastic job in providing perinatal mental health support to so many women.
17. Following the closure of the special care baby unit at Fairfield general hospital in my constituency, new mothers and families are now faced with travelling to either Bolton or north Manchester. In the light of the recent report from the charity Bliss on the costs of having a premature or sick baby, will my hon. Friend ensure that appropriate support is in place for Bury families who are struggling with a baby who needs specialist hospital care? (903435)
My hon. Friend makes an important point, and he has been a strong advocate for local mothers and families in his constituency. But he will also be aware that there was a review of maternity services in the Greater Manchester area that recognised that, by changing the way in which services were delivered, there could be improvements and 25 young children’s and babies’ lives could be saved each year. There has been a review, and that review is saving lives, so I commend any similar service reconfiguration that delivers similar benefits to women and patients.
The Government’s focus is on reducing calories overall rather than focusing solely on sugar, and informing consumers so that they eat fewer calories, including sugar, is key to the responsibility deal. We have 36 companies cutting calories under the calorie reduction pledge, which is often through the reformulation of popular products, and our Change4Life campaign informs families how they can improve their diet and health. Some of the early evidence from Public Health England’s January smart swaps campaign is really encouraging.
My understanding is that the consumption of sugary drinks is banned in schools. I have discussed that with the Department for Education, but I am happy to take up the point.
I must correct the hon. Gentleman on his point about childhood obesity. Let us give credit where it is due. Childhood obesity levels are for the first time levelling off and we are beginning to see some progress, although there is much further to go. We have a straightforward disagreement. The Government believe we need to give people information. The Opposition believe in a top-down, state-driven approach.
Last week, I launched a campaign to save up to 6,000 lives by halving avoidable harm and avoidable death in the NHS. I am inviting all NHS trusts to sign up to safety, by putting together their own plans, with support provided by NHS England, Monitor, the NHS Trust Development Authority and the NHS Litigation Authority. Learning from hospitals with the best safety records anywhere in the world, such as Virginia Mason in Seattle and Salford Royal here in England, we have a once-in-a-generation opportunity to put behind us the tragedy of Mid Staffs and make the NHS the safest health care system in the world.
People in Exeter and Devon with mental illness are now waiting more than two years for treatment. This is totally unacceptable and will, if it has not already, lead to the loss of lives. The Minister has repeated today his criticism of NHS England’s decision to cut funding for mental health, but as the shadow Minister reminded him, he is not a passive observer; he is the Minister responsible. What will he do about it?
The reason we are not passive observers is that we have made some substantial improvements in mental health provision since coming to office, including legislating for parity of esteem, which is precisely why the right hon. Gentleman feels able to ask that question. There are 55,000 more people every year getting a dementia diagnosis and nearly 80,000 people going on to psychological therapies. Lots has been done, but there is lots more to do, and we will continue to do everything we need to until we get that parity of esteem.
T3. The whole House will have been appalled by evidence from the Winterbourne View case and others of inappropriate methods of controlling patients. Will the Minister now take action to ensure that restraint is only ever used as a last resort, whether in care homes, hospitals or mental health units? (903410)
The evidence from Winterbourne View was utterly shocking. The Mind survey subsequently revealed that restraint is used far too much across the health system. We committed to reviewing the guidance, and I am pleased to say that we will publish new guidance later this week to address the very point my hon. Friend raises.
The Government’s damaging reorganisation has weakened the grip on NHS finances. Figures slipped out the day after the Budget show that NHS hospitals are in deficit for the first time in eight years, hospital trust deficits are three times higher than they were a year ago and twice as many foundation trusts are in the red. Will the Secretary of State now commit to publishing the final year-end figures for all hospitals in one annual account so that the House can hold him to account for his mismanagement of public money?
It is financially challenging for the NHS, but we will not lose control of NHS finances, as happened under Patricia Hewitt. I remind the hon. Lady that for nine of Labour’s 13 years in office the NHS trusts sector as a whole was in deficit. We are getting a grip of those problems. We will publish the figures she wants, but the reason it has been particularly challenging this year is that hospitals have responded to the Francis report and hired 3,500 additional nurses to ensure that we have proper care on our wards.
T2. How does the Minister respond to a warning from the UK’s top cancer doctors that the planned closure of 18 specialist centres for treating the victims of brain cancer is putting patients’ lives at risk by delaying treatment? It is clearly at odds with the Prime Minister’s assurance about improving access. Those top brain surgeons say that it is appalling. Will the Secretary of State stop it and engage in a proper and meaningful review? (903409)
The review the hon. Gentleman refers to is a consultation by NHS England to ensure that we commission specialist services better. There has been a 23% increase in the number of cancer sufferers getting treatment under this Government. We want to improve on that record even more, which means having sensible discussions on how to improve specialised commissioning, and that is what is going on.
T6. In 2010 the Chancellor specifically set aside funding for the rebuilding of the Royal National Orthopaedic hospital in my constituency. The site has planning permission. Will my hon. Friend update the House on progress so that we see work on the ground before 2015? (903413)
My hon. Friend will be interested to know that the NHS Trust Development Authority is reviewing the trust’s business case and is working with the trust to ensure that its plans are affordable. I know that my right hon. Friend the Secretary of State has visited the hospital and is a great champion of it. I will ask the TDA to keep my hon. Friend fully up to speed.
T4. I have a question for the Secretary of State on performance-related pay. He will know that a year ago part of the Greater Manchester ambulance service was privatised to Arriva. For the first nine months of its contract, every single month it missed its targets for getting patients to hospital on time and for collecting patients within a scheduled time frame, yet over the same period it was awarded £400,000 in performance-related pay. Is that good use of public money? (903411)
The hon. Lady will be aware, of course, that it was the right hon. Member for Leigh (Andy Burnham) who had the most to do with introducing the private sector and agreeing ambulance service contracts in the Greater Manchester area. I think that Opposition Members need to remember their record on private sector involvement. If she has concerns, we will of course look into them.
As the hon. Gentleman will be aware, we are in negotiations with the British Medical Association and other health care unions about the future shape of the NHS consultant contract and junior doctors contract. We are determined to have a contract that remains fit for purpose in future and to reform the contract that we inherited from the previous Government, which was not fit for purpose. We will continue to work with the BMA to make sure that we protect the interests of patients and deliver better care.
I very much welcome the taskforce reviewing the effects of the working time directive; as my hon. Friend knows, I have campaigned long on the issue. Given the severity of the evidence, which shows that more than a quarter of a million hours of surgical time are lost per month because of the directive, will my hon. Friend assure me that he will not only listen to, but act bravely and robustly on, any recommendations to rid the NHS of this very dangerous directive?
My hon. Friend has campaigned with great vigour on the issue, and rightly so. The European working time directive, to which the previous Government signed up in a headlong and reckless way, has damaged continuity of patient care and the training of the consultants of tomorrow. That is why we set up the independent review. We look forward to its recommendations and we will make sure that we respond to those appropriately in due course.
T8. The Health Secretary talks about Welsh patients flocking to the English NHS, but is he aware that the number of English patients going to Welsh hospitals has increased by more than 10% since 2010? Does that mean that the English NHS is in crisis? (903415)
Unfortunately, a third of Welsh patients do not get things such as urgent scans within six weeks, compared with just 1% of patients in England. The Welsh NHS is struggling badly. I urge Labour, if it is to be consistent, to work closely with its colleagues in Cardiff to give a better standard of care to people in Wales, because they deserve a good NHS as well.
There is due to be a consultation on the future of maternity units at Clacton and Harwich hospitals. Last week, however, the management team at the already troubled Colchester trust decided to shut the units anyway. That has caused great anger and concern locally. Will my hon. Friend write to the board to ensure that it does not prejudice the outcome of the consultation and that decisions are made on the basis of fact, not muddled management?
I will certainly be happy to look into the issue. My hon. Friend will be aware that the closure decisions were made on clinical safety grounds, for the safety of women. It is a temporary issue. One of the outstanding problems in my hon. Friend’s part of the world and elsewhere when we came into government was a historical shortage of midwives. That is why we are investing in more midwives. There are already 1,500 more in the NHS and I believe that six more will be recruited to the local NHS in his area.
T9. Mental health services in Telford are under review and the Castle Lodge facility has been closed for a considerable time. It has been heavily used by people in the community who do not have to be admitted into Shrewsbury. Will the Minister confirm that if local people want to retain Castle Lodge, as I believe they do, it will be retained? (903416)
Rural surgeries such as Ambleside, Coniston and Hawkshead in my constituency are under threat because of a combination of historical funding difficulties and the removal of the minimum practice income guarantee. Will the Minister agree to look into the setting up of a strategic small surgeries fund, so that rural surgeries have a confident future?
My hon. Friend and I have discussed the issue before. As he is aware, price premiums are already built into the funding formula to support rural practices. NHS England has already identified about 100 practices that may need additional and special support. Commissioners will be looking to provide that and work with those rural practices and others that may have challenges.
We have 1.2 million more people going to A and Es every year. The ambulance service has, on the whole, been doing a good job, but there have been areas where there are problems. We need to change our attitude towards the capabilities of ambulance services, particularly the ability of paramedics to treat people on the spot, and we are driving through that change.
In the absence of a definitive policy decision on the fortification of basic foodstuffs with folic acid, what steps are Ministers taking to encourage women of child-bearing age to take folic acid to reduce the incidence of neural tube defects such as spina bifida and hydrocephalus?
My hon. Friend is right to highlight this important nutritional need for women who are planning to get pregnant or are pregnant. He and I are meeting soon to discuss fortification as a policy area. I urge all GPs and health services to take every opportunity to highlight to women this important nutritional requirement.
Last week at Queen’s university in Belfast, a significant breakthrough for ovarian and breast cancer means that women who might otherwise opt for an oophorectomy can still have children. Does the Minister agree that money spent on cancer research can increase quality of life and life expectancy? What help will Government give to cancer research at Queen’s university in Belfast?
The hon. Gentleman is right that research is vital, and a great deal of it is going on in this area. I recently met the all-party group on ovarian cancer to update it on that research, and I will be happy to update him after questions. He has mentioned before how research applies across our United Kingdom. As he knows, whatever we learn through research in England is always shared across the different countries.
Health care in Cambridgeshire has been underfunded for years, and mental health care particularly so. This is getting worse as a result of the private finance initiative contracts that were signed, the differential deflator for mental health and physical health, and the simple fact that mental health demand is up. Will the Secretary of State meet me and the mental health trust to work out a way out of these problems that will not harm patients?
The Francis report highlighted the importance of ward sisters in properly managing wards, so why has the number of band 8 nurses in the north-east fallen by 87 since the general election?
The number of nurses overall is up by 1,600 since the general election. Let me be absolutely clear that I do not believe in a system where the Secretary of State is micro-managing precisely how many nurses there are in every ward in every hospital in the country. Because we have protected funding that Labour wanted to cut, there are more doctors and more nurses than there were when it was in government.
Ten babies a day are born at Kettering general hospital. May I welcome the recent award of £400,000 of NHS modernisation funds to the hospital’s 33-bed maternity unit and urge the Minister to encourage NHS England to prioritise areas of high population growth such as Kettering for future funding?
I know that the staff at my hon. Friend’s maternity unit work tremendously hard to look after patients, and it is important that we gave them the right facilities in order to do so. I am delighted that, like over 100 other birthing units in the country, they have received money to make sure that women are treated with greater dignity and that the quality of care is as high as it can be.
I cannot speak highly enough of the staff at Southport hospital who cared for me when I spent three days there as a patient last month. They told me that GPs now routinely send older patients straight to A and E because their funding has been cut and that community services are no longer in place to support people in their own homes, which is all leading to a crisis at A and E. Is not the sad reality that what is happening at Southport is being repeated up and down the country as a result of the Government’s disastrous reorganisation and cuts to front-line services?
I am very pleased about the excellent treatment that the hon. Gentleman received. The problems that the nurses talked about are exactly why, from today, we are reintroducing named GPs for everyone aged 75 or over to bring back the kind of personal care and personal responsibility for patients that I am afraid was so sadly abolished previously.
The National Audit Office has today published its report on the Royal Mail sale of shares. The report confirms that we achieved our primary objective of securing a sale of shares, allowing Royal Mail to access the private capital it needs to invest and thrive. As a result the taxpayer now faces reduced risk of having to provide financial support to the universal postal service.
It was right that we took a cautious and measured approach to the sale. That approach was taken in the light of our primary objective, and reflects the considerable risks we faced due to industrial relations and challenging market conditions.
The price range for the shares was set following a comprehensive programme of engagement with over 500 potential investors and was benchmarked against valuations of comparable postal companies. I am clear that this was the correct approach to secure a successful transaction.
A more aggressive approach to pricing would have introduced significantly greater risk. The advice that we received in this respect was unambiguous. There was no confidence that a sufficient number of buyers would offer a significantly higher price. A failed transaction and the retention of Royal Mail in public ownership would have been a very poor outcome for the taxpayer, as the NAO report confirms.
Achieving taxpayer value is about securing both short-term and long-term benefits. In the short term, we have delivered a successful transaction, which raised £2 billion for the Exchequer, enabled over 690,000 members of the public to buy Royal Mail shares and put in place the largest employee share scheme of any privatisation in nearly 30 years. In the long term, we have reduced the ongoing risks to the taxpayer by putting Royal Mail in a position where it can operate commercially and finance its own funds if needed. In doing so, as the NAO confirms, we have achieved our key objectives.
The sale of shares in Royal Mail has delivered on our commitment to protect the universal postal service and safeguard vital services for the taxpayer.
Mr Speaker, you know it is April fool’s day when a report is published by the National Audit Office saying that
“the Department…could have achieved better value for the taxpayer”
but Ministers go out to the media, and come to this House, to declare their privatisation a success. They must think we are all fools. What planet are they living on?
There are no two ways about this: the report delivers a damning verdict on the Government’s botched privatisation, which has left the taxpayer disgracefully short-changed to the tune of hundreds of millions of pounds. Let us be clear: the issue was not whether they would be able to sell all the shares—one can usually flog off something for a knock-down price—but whether, in so doing, they secured best value for the taxpayer. They have sought to hide behind the advice they received from the bankers, who made millions out of the deal. Will the Secretary of State confirm that those advisers acted within “inflexible” constraints set by Ministers to achieve a sale as soon as possible in this Parliament? Had they waited for the markets to settle and for further years’ profits to be delivered, they could have achieved a better price. Secondly, is it not the case that having judged that Royal Mail’s profits were doomed to decline, far from making an objective judgment, they simply refused to entertain the notion that it could succeed in public hands, although the financial results for the last financial year showed a trebling of profits?
Finally, we were promised that the Secretary of State would secure a long-term and supportive shareholder base, but the opposite has turned out to be true. Will he confirm that the 17 supposed long-term investors he prioritised had sold almost half the shares allocated to them within weeks and that hedge funds now make up a large number of the shareholder list?
The Secretary of State dismissed claims that a cherished national institution was being sold off on the cheap as “froth”. The truth is that this has been a first-class disaster for the taxpayer and those he once referred to as “spivs and gamblers” are laughing all the way to the bank. The very least he can do today is apologise.
The last thing I intend to do is apologise. What I do intend to do is refer to what the report actually said, as opposed to the spinning and froth that is being generated around it. Let me read again the report’s initial conclusion on value for money:
“By floating Royal Mail on the Stock Exchange the Department achieved its key objectives of introducing private capital and commercial disciplines. Given Royal Mail’s prospects and prudent initial capital structure it is now less likely that the taxpayer will have to provide public support for the universal postal service.”
That is what it actually said.
Let me address the criticisms, if that is what they were. The first was that the Department was cautious, but I would have thought that caution in this context had a lot to commend it. The reason the Department was cautious was the very real risk that the floatation could fail. The choice we faced was: had the floatation failed, it would have remained in public ownership and, despite the hon. Gentleman’s preference for keeping it in public ownership, the valuation placed on it continuing in public ownership was about £1 billion. That was not disputed by the National Audit Office. The alternative—the floatation which happened—resulted in a value for the taxpayer of £2 billion in cash and £1.5 billion in continued value of the retained sale. There was a choice between the £3.5 billion that resulted from the privatisation and the £1 billion had it failed, so it is absolutely right and sensible that we were cautious.
The hon. Gentleman made the point that there was a lack of flexibility in the initial public offering system. Indeed, the National Audit Office makes that point: there was a lack of flexibility. The question, therefore, is: were there any alternatives? Could this have been done in a different way? The Government could have eliminated the retail investors and had more flexibility over price at the time of sale, but as it happens one of the successes of the privatisation is the fact that 670,000 investors now have shares.
The other way of selling Royal Mail would have been through a trade sale, and of course we looked at that as an option. One of the reasons we did not pursue it was that we looked at the history of privatisation under the Labour Government. and there was one very good example of what happens when a trade sale is pursued: I refer the hon. Gentleman to the NAO report on the privatisation of QinetiQ. What happens with the supposed flexibility of a trade sale—[Interruption.]
Order. Mr Blenkinsop, before Christmas I specifically advised you to take up yoga or some other similarly therapeutic and calming activity. Moreover, your brother very wisely purchased you a book on the subject. It is evident to me that you have not yet read it.
What happened in that trade sale was that a company with an equity value at sale of £125 million was eventually valued at £1.3 billion—10 times what the Labour Government sold it for. That is the alternative model with which we were confronted.
Let me address specifically the issue of the long-term institutional investors. The hon. Gentleman is absolutely right to say that one of the key objectives, to which I attach particular importance, was ensuring that the long-term institutional investor base was strong, and indeed it is. When the hon. Gentleman looks at the breakdown of share ownership, he will see that between two thirds and 70% of the shares held as a result of the IPO are held by those long-term institutional investors. When we put that with the Government’s retained shares and those of the workers, we see a very large majority of investors who are committed to the long-term strength of the company. One does have to ask the question: why did some of the long-term institutional investors sell? Some bought, some sold. The reason they sold was that they considered the share price after sale was overvalued. It was an obvious market reaction, and that was the consequence. None the less, having a long-term investor base remains a basic objective, and we have achieved that fundamental objective.
Let me turn to the issue of the valuation, to which so much importance is attached. It should be blindingly obvious, although I do not think it is to the Opposition, that trying to sell 600 million shares at one go is a fundamentally different proposition from the 2 million to 3 million sold in daily trading, which explains why the price has varied since the flotation.
I have said and I continue to say that there is a great deal of froth in the valuation of this and other shares—that is how equity markets operate—and this particular share is surrounded by a great deal of volatility. There are two main reasons for that. The first is a great deal of uncertainty over industrial relations in a company that has had a very troubled industrial relations history. It is worth pointing out—I do not know whether the hon. Gentleman noticed—that the mere mention last week of a Unite strike took the stock price down by 20p. That was the context in which we had to make the sale. The second key point—[Interruption.] I am trying to respond to the hon. Gentleman’s points. [Interruption.]
Looking at the volatility of shares, this company is exposed to a considerable level of competition, as a result of actions of regulators beyond the Government’s control. The estimate has been made—I think that I cited this to the Business, Innovation and Skills Committee —that a 1% fall in sales is the equivalent of a 17% fall in profits for this company. We hope, and we have every reason to be optimistic, that with the very good management of the company, the co-operation of the work force and the investment that privatisation now makes possible we shall have a positive outcome in terms of competitiveness, but there is a great deal of uncertainty, which lies behind the volatility of the shares.
We in the Government have been criticised, not least by the Select Committee, over the past few months because we failed to take account of the estimates made by the banks that were bidding for business. One section of the NAO report—the hon. Gentleman has clearly not read it—completely vindicates the Government’s decision to ignore those estimates as completely worthless. They were touting for business, the estimates had no value whatever and we were quite correct to ignore them. Much of the propaganda that he and his colleagues have developed over the past few years has proved to be completely beside the point.
Let me make a final point on valuation. The hon. Gentleman gave us a lecture on the dangers of undervaluing public assets, but let me just quote to him his Government’s experience of the difficult art of valuing assets. The former Prime Minister, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), sold large quantities of gold at between $250 and $300 an ounce, but the price subsequently increased to more than $1,500—five times the original value. That is the nature of the highly volatile markets in which we have to operate.
The NAO report reached the important conclusion that we had successfully achieved our objectives. Under this Government, we have taken a loss-making public enterprise and turned it into a highly successful, respected public company.
Order. There is much interest in this subject that I am keen to accommodate, but some pithiness from Back and Front Benchers alike would be appreciated. [Interruption.] Order. The Secretary of State was sorely tested by a lot of very noisy heckling. It is always a pleasure to listen to the right hon. Gentleman, and I know that he will take it in the right spirit if I gently point out to him that his response to the shadow Secretary of State was four times longer than his original statement. A degree of economy would help us all, and I feel certain that this exercise will be led by the illustrious figure of Mr Brian Binley.
The evidence that the Select Committee heard on this issue showed that the prime movers in the bid, as contracted by the Department, had a range of up to £3.30. They confirmed to the Secretary of the State that no bidders would go above that level. That proved to be totally untrue. Their colleagues who helped build the book made a killing at the expense of the taxpayer. Can we be assured that such a debacle will not happen again, that the system will be changed, and that there will be a fairer deal for the taxpayer than we have got from this unethical and, quite frankly, immoral procedure?
I think that the hon. Gentleman misunderstands the basis on which the valuation was made. It was based on a sampling of 5,000 potential buyers among institutional investors and on a comparison with similar privatisations, such as that of the Belgian post office. The process was rigorous and it had nothing whatever to do with the undue influence he describes.
The fact remains that the key determinants of the pricing were a select group of banks, acting as advisers to the Government or in the book-building process. From the perspective of the taxpayer, the sight of banks advising the Government on a price and then buying shares at that price and selling them at a profit or, in some cases, subsequently buying them at higher prices absolutely stinks. Will the Secretary of State assure us that, in any future privatisation, no bank that is involved in advising the Government on the price level will be allowed to buy shares?
Does my right hon. Friend agree that, despite the great hindsight shown by the Labour party, the decision was taken on the basis of the risks that we faced at the time? We should not have taken risks at any cost. If we had, the Labour party would be criticising us for a failed privatisation instead of a successful one.
Is the Secretary of State aware that what he has said will reverberate every single day until the general election, including in Twickenham, as those postmen and women who have been slagged off by him from the Dispatch Box today talk on every single doorstep? What they all want to know is that not one single penny from those priority bidders will finish up in the pockets of the Tory party or the Liberal party.
Not even Michael Heseltine at the zenith of his ministerial powers and capacity felt that he would be able successfully to privatise Royal Mail. Are not ministerial colleagues much to be congratulated on having privatised Royal Mail so successfully? Does my right hon. Friend agree that it does not lie in the mouths of those who left this country with an eye-watering public deficit to talk about concern for the taxpayer’s interests?
The right hon. Gentleman’s initial remarks are apposite. Successive Governments have tried to privatise the Royal Mail for a long period. I would understand it if the Opposition had taken a principled stand on public ownership, but they have not. Indeed, I inherited a failed privatisation from the Labour Government and we made a success of it.
It does not at all. The fact that the Royal Mail was improving its commercial performance is very good news, but it was over one year and it had to be sustained. The only way in which its profitability could be maintained was through large-scale investment, and the only way in which it could entertain making large-scale investment was by using capital markets under private ownership.
Yes, I do. We need to go back to the fundamental reason why not just this Government but the Labour Government accepted that the company had to go into private ownership: it was about mobilising a large amount of investment without it falling on the public accounts. That is what we have achieved.
Seventy-seven per cent. of Scottish people opposed the Royal Mail privatisation and 78% of Scottish MPs voted against it, but Scotland got it. After this travesty, what should the Scottish people do this year to ensure that we get the postal services that we want and require?
I am aware that the Scottish National party has said that it will renationalise the Scottish bits of Royal Mail if it gets independence. It has not explained how it will pay for that, nor has it explained how it will pay for the extra cost of the universal service obligation in an independent Scotland.
Certainly, one of the significant factors hanging over the privatisation was the threat of industrial action. There was no point in postponing it, because the industrial action would have been rolled over. It certainly had a depressive effect on the market.
When the Secretary of State gave evidence to the Business, Innovation and Skills Committee about this issue in October, when I was still a member of the Committee, we questioned him about what we perceived to be an undervaluation. He said that rather than looking at the value a few days after flotation, it would be more realistic to look at it after three or six months. We are now there and it was clearly undervalued. What does he say to the British people about giving away one of our national assets?
I think that what I actually said was between three and six months on the one hand and a year on the other. I have subsequently been criticised by people in the market, who feel that that is too short a term and that two years would be a better perspective.
May I declare my interest as a former employee of QinetiQ? Will my right hon. Friend reflect on the National Audit Office report on the privatisation of that company under the last Government, which not only concluded that they undervalued QinetiQ, but strongly criticised the management incentive scheme, which rewarded the top 10 managers with £107 million of taxpayers’ money? Does he agree that the best thing the Opposition could do to learn from the privatisation of the Post Office would be to digest that report and come here to apologise?
This Government, like the previous Conservative Government, have form. One need only look at the denationalisation of the energy industry and the railways, which were sold off cheap. What will the Secretary of State do about the increase in the price of stamps and the redundancies at Royal Mail?
The hon. Gentleman will know that the first-class stamp is subject to regulation. He assumes that the commitment to sell off Royal Mail was simply a product of this Government and previous Conservative Governments. He seems to have forgotten that the last Labour Government tried to privatise Royal Mail.
The NAO report shows that about 167,000 employees of Royal Mail —nearly 100%—have taken up the option of the free shares, which has given them a stake in its future. When a sale delivers nearly £2 billion to the taxpayer, creates nearly 700,000 retail investors and gives so many people a stake in the future of their business, is it not something that we should celebrate?
The Secretary of State has given an estimate of what profits the public will make from their 30% share ownership in the company. Will he say what the loss of profits would be to the public over the next five years had we done the correct thing and kept Royal Mail in public ownership?
Does my right hon. Friend agree that almost all initial public offerings are put forward at a discount—indeed, at a larger discount than secondary public offerings because there is no market in the shares until the offering has been made? Does he also agree that because of the large supply that comes on at the point of an IPO the discount has to be considerable, and that the stock price having done so well is a sign of enormous confidence in the economic policies of Her Majesty’s Government?
The Government’s advisers, Goldman Sachs, made more than £12 million profit from the sale of Royal Mail shares —a gross conflict of interest by any standards. Will the Secretary of State rule out completely the payment of any bonuses to those advisers, and put the money back into the public purse?
We are having this urgent question because the flotation of Royal Mail was more successful than anybody thought possible up front. Almost 100% of employees took up their shares, 700,000 retail investors bought shares, and institutions invested massively. The Government are now a 30% shareholder. What plans do they have for the long-term future of their shareholding?
Seventy per cent. of the issue was reserved for financial institutions, including hedge funds. This morning on the “Today” programme, the Minister of State, Department for Business, Innovation and Skills (Michael Fallon) repeatedly said, “We got it away”. Would it have been more accurate for him to say, “We gave it away to our hedge fund friends who have given £38 million to the Conservative party”?
In his remarks the shadow Secretary of State referred to profiteering by spivs and gamblers. Will the Secretary of State confirm that the rate at which bankers were paid for this offering was approximately half the rate paid for QinetiQ?
Despite hedge funds and shareholders making a killing from Royal Mail, it seems that is not enough. Yesterday, the price of a first-class stamp went up by more than 6%—more than twice the rate of inflation. Having failed to protect the taxpayer, what will the Government do to protect the consumer, particularly in the monopoly areas of this now private company?
I spoke with Royal Mail employees when I visited their sorting office in Crawley a few months ago, and they were pleased with the free shares they were given. Will my right hon. Friend say how important that is in terms of employees having a stake in their future business?
Royal Mail has something like 2,000 properties in high-value areas of real estate round the country. It was valued at approximately £1 billion, when one of those sites in London is itself equal to £1 billion in real value. How come it was sold off so cheaply to the detriment of taxpayers and my constituents?
I do not think the hon. Gentleman was listening to one of my earlier replies in which I made it clear that an independent valuation of those sites confirmed the authenticity of what was proposed. It was in the prospectus, and nobody has subsequently challenged that.
I have been listening with amazement to the crocodile tears from Opposition Members. Should we not celebrate the successful privatisation of Royal Mail, which enables it to compete more successfully in a challenging environment and give its employees a much more secure future?
Many of the other 69 million have policies with the leading pension funds and insurance companies, which were the long-term institutional investors in which these companies are now invested, so there is actually a much wider benefit. We have repeatedly made the point that had the flotation failed, the rest of the population would have been up for the losses.
In the past three months in my constituency 25% of mail was delivered by companies other than Royal Mail. Does my right hon. Friend agree that that represents a direct challenge to Royal Mail, and that it is vital that the work force and private investors put in capital so that it can successfully compete against other competitors?
My hon. Friend is right. That is why a do nothing option was not viable, and why the alternative that the shadow Business Secretary promotes of just letting this drift was not sensible. Royal Mail is subject to severe competitive pressure, and ultimately it is subject to regulation at UK and European level—that is not something the Government can stop. All we can do is help equip Royal Mail to face that competition, and that is what we have done by putting it under private ownership with access to capital markets.
If the Minister will not accept responsibility and consider his position, will he at least admit what a disaster this has been for the taxpayer, commit himself to a review of what happened, and reassure the House that it will not happen again?
There is no disaster or reason to apologise for what has taken place. There are many positive aspects of this privatisation, which I have already set out. Of course there are lessons to be learned regarding more technical criticisms that the NAO has made about the flexibility of the process, and we will listen to those should such a situation arise again.
The comparison of this privatisation with QinetiQ is relevant because, subsequent to that privatisation, many employees in Bedfordshire were thrown out of work while the bosses ran off with 107 million quid. Can my right hon. Friend advise me how much money the bosses of Royal Mail made from this privatisation, and say what has happened to the employees in terms of their security of employment and pensions?