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Lords Chamber

Volume 597: debated on Tuesday 9 February 1999

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House Of Lords

Tuesday, 9th February 1999.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Carlisle.

Message From The Queen

My Lords, I have the honour to present to your Lordships a message from Her Majesty the Queen signed by her own hand. The message is as follows:

"I have received with great satisfaction the loyal and dutiful expression of your thanks for the Speech with which I opened the present Session of Parliament".

Company Cars: Excessive Mileage

What measures they plan to take to discourage excessive mileage by company cars.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions
(Lord Whitty)

My Lords, the Government's White Paper, A New Deal for Transport, contains a wide range of measures to encourage more sustainable car use, many of which should help to discourage unnecessary mileage by company car drivers. We especially want to promote green transport plans among large employers, aimed at reducing car use for travel to work and on business. The Government are also implementing, over five years, substantial increases in tax where employers provide company cars with free fuel for private motoring, in order to discourage its provision. And, as mentioned in the pre-Budget Statement in November, the Government are continuing to review how the company car taxation regime might be altered to send better environmental signals.

My Lords, I thank the Minister for that moderately satisfactory Answer. Is he aware that those who drive company cars while on private business cover more than twice the mileage of other car users? Does he agree that the practice should be discouraged as a way of reducing both the amount of traffic on the roads and the amount of pollution? Is it not time that something rather more drastic was done about this, along the lines set out in the Labour Party manifesto?

My Lords, as I said, a number of measures are being taken to reduce the use of company cars. It is true that the level of mileage is higher in total for company cars than it is for other comparable cars. The safety record is also less good and, because they tend to be larger cars, there are consequences in terms of emissions. As regards the taxation regime and further policy, your Lordships will have to observe a little patience. There will be a Budget Statement later this year. I could not possibly pre-empt anything that might be said in that context.

My Lords, is the Minister aware of a report in today' s Guardian regarding the Boots company, which, as a major employer, is trying to encourage green transport plans for its employees by subsidising a local bus service? The Inland Revenue has indicated that that represents taxable benefits in kind and is to fine the company half a million pounds. How does that fit in with the Government's green transport policies?

My Lords, I am aware of the report. Indeed, the Guardian is catching up with a story that appeared in the rest of the press a week ago. The provision of transport in kind by employers has been taxable for many years. We are examining the perverse effects of that in order to give better signals in that area as well. However, at present the Inland Revenue is right. Under existing tax rules such provision is taxable.

My Lords, rather than mileage, is it not more important to curb polluting emissions? That is a matter for the Chancellor in his forthcoming Budget, as the noble Lord has indicated. However, should the Government now be commended for themselves restraining excessive mileage as a result of their apparent preference for helicopters?

My Lords, the number of occasions on which the Government use helicopters is relatively small. Nevertheless, we are examining all areas where the means of transport used by government departments add to pollution and congestion with a view to cutting back on them and we are asking the public to take similar measures.

My Lords, I understand what the Minister has said regarding the Government's proposal to discourage excessive mileage in relation to company cars. But is it not the case that the greater the mileage driven in company cars, the more the tax liability of the individual is reduced? 'What do the Government intend to do about that?

My Lords, the present situation is precisely that. There is a perverse incentive to increase the alleged business miles over the figure of 18, 000 a year. As my right honourable friend the Chancellor indicated, he is examining the situation to try to remove the perversity. More than that I cannot say today.

My Lords, why does the Minister's department sanction car allowances for local councillors which recompense those who use large cars at a much higher rate than those who use small ones?

My Lords, a significant number of expense systems—in local government, national government and in the public and private sectors—need to be looked at from that point of view. We should all consider it.

My Lords, does the Minister agree that the important principle raised in the Question is part of a much wider and greater problem? What action do the Government propose to take to try to induce the travelling public to economise on fuel and, more importantly, to use more fuel efficient vehicles?

My Lords, the Government have already taken a number of measures in relation to taxation which should encourage the use of smaller and more fuel-efficient cars and more energy-efficient forms of fuel. There may well be further measures which we could contemplate in that direction. But there is a limit to the extent to which we can achieve such things through traditional taxation. We also have proposals which would give local authorities the power to raise road user charges and workplace parking charges in order further to discourage the inappropriate use of the car.

My Lords, will the Minister look at the other side of the coin in this argument? Let us suppose that a young executive is denied a company car and in turn buys an older model which is less environmentally friendly. Surely, that is hardly the best way to protect the environment. Likewise, he could buy a foreign car, but would that not be detrimental to the British economy and our balance of payments position?

My Lords, I fear that in this globalised economy a number of business executives already drive what could, in one term or another, be called foreign cars. There is a possible indirect effect from using older, less fuel-efficient cars, but the reality is that a company car, in terms of both business and private use, tends to be used more intensively, tends to be larger and therefore tends to create greater emissions than a private car. It is not a straightforward issue but nevertheless the overall picture is that there is excessive use of and therefore pollution by company cars.

My Lords, the noble Lord said that local government arrangements need attending to. Do the Government intend telling local government what to do, or allowing them to do it for themselves?

My Lords, expense systems are a matter for individual local authorities. In general, guidance to local authorities is that they should introduce more environmentally friendly systems of transport, both in terms of their own transportation systems and the way in which they compensate their workforce.

Eu Enlargement: Progress

2.46 p.m.

When they anticipate that the first group of applicant states from central and eastern Europe will become full members of the European Union.

The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office
(Baroness Symons of Vernham Dean)

My Lords, successful enlargement of the European Union remains a central objective for the United Kingdom. So I am pleased to be able to confirm that the accession negotiations are on track. But it would be premature to try to predict now when the first accessions might take place. The overriding priority is for the candidates and the EU to concentrate on our mutual preparations for enlargement. If any timetable were to be set at all, it could only be done rather later in the process.

My Lords, I thank the Minister for that Answer. She recognises that it is now seven years since the first of the applicants applied to join. However, if it is another seven years before they eventually join, disillusion among their publics, already evident in Poland, risks some of the underlying strategic objectives of British and other West European foreign policy. That policy is to ensure that we establish security, democracy and prosperity across central and eastern Europe. Can the British Government do more to ensure that negotiations proceed with greater speed than so far?

My Lords, I am sure we all hope that it will not be a further seven years. I believe that the British Government got the accession negotiations with Cyprus, Hungary, Poland, Estonia, the Czech Republic and Slovenia off to a good start on 31st March last year. The initial phase of negotiations—that is the screening of the acquis—is going well. Substantive negotiations with the countries I have just mentioned on the first seven chapters of the acquis began on 10th November. We support the German presidency's aim of opening negotiations on the next eight chapters and bringing the total of 15 to some conclusion by the end of that presidency at the Cologne Council in June. So 15 of the 31 chapters will, we hope, be dealt with during that period. I believe that that is reasonably good progress.

My Lords, may I ask the Minister whether the Government have carried out any objective research as to whether it is in the interests of the central and eastern European countries to have full membership of the EU? For example, have they examined the recent publication The Poisoned Chalice? If so, can they say why they disagree with it, if indeed they do?

My Lords, I believe that it is for the central European states themselves to judge what is in their interests. They have so judged, some as far back as seven years ago. They have been pursuing their desire to join the European Union. That is true not only of the countries to which I referred in my Answer to the noble Lord, Lord Wallace. It applies also to Bulgaria, Romania, Latvia, Lithuania and Slovakia, which are now part of the enlargement process. Preparation for their membership continues. I believe that those countries, like ourselves, have assessed that enlargement will lead to greater stability, freedom and democracy throughout Europe and to the creation of the largest single market for trade and investment in the world.

My Lords, is my noble friend satisfied that the interests of the applicant countries are better served by their own counsel on the question of membership of the EU rather than by the views of the noble Lord, Lord Pearson? Can my noble friend comment on whether the present budgetary provision based on a percentage of GDP is likely to be sufficient to accommodate the interests of the applicant members, even though we hope that the common agricultural policy and expenditure thereon will be severely limited?

My Lords, I had hoped that what I said would be seen to accord with the remarks of my noble friend, although perhaps I said it rather more politely. It is for these countries to decide for themselves. In December the Vienna European Council welcomed progress made on the "pre-ins"—the countries not involved in active negotiations at the moment—but agreed with the Commission's recommendation that the Union was not yet able to begin substantive negotiations with those countries. There will be a review at the end of 1999. As to the other issues raised by my noble friend, we are making progress and hope to have further reports by the end of March.

My Lords, does the Minister agree that in respect of Latvia, with under 5 per cent. inflation, 95 per cent. of the privatisation programme completed, and 40, 000 of the ethnic minorities undergoing voluntary language training, it is high time for us to push for that country to start negotiations? Will the Minister suggest to her colleague in another place, the Secretary of State for Foreign and Commonwealth Affairs, that when he next speaks to the Prime Minister of the Russian Federation, Mr. Primakov, he extracts from him an assurance that the Russian Federation will cease to exert pressure on Latvia and that if he fails to receive such an assurance he will put down the receiver?

My Lords, I hardly believe that I am in a position to judge whether the Secretary of State would regard such action as appropriate. Many people have considerable sympathy with the points that the noble Earl makes about Latvia. When the matter was last examined it was agreed and confirmed by the Vienna European Council that Latvia had not quite reached the stage of development to enable it to begin substantive negotiations. But the country is making progress and the position will be reviewed again at the end of this year.

My Lords, given that the timing of the accession of central and eastern European applicants greatly depends on the readiness of the EU institutions, can the Minister inform the House what steps the Government and their European partners have taken to bring about institutional reform?

My Lords, a great deal is happening on institutional reform. We are committed to looking at all of these issues. The three main tranches of such reform are the common agricultural policy, the structural and cohesion funds and the stabilisation of expenditure. Those matters are being looked at under the auspices of Agenda 2000. We hope to have reports by the end of March, which is only weeks away, with final regulations being adopted before the European Parliament elections in June. I believe that we are making good progress on all three fronts.

Lomé Convention

2.54 p.m.

What issues have become the most significant in the current renegotiation of the Lomé Agreement between the European Union and the ACP states; and what are their priority objectives for the outcome of those negotiations.

My Lords, the renegotiation of the Lomé Convention began in Brussels on 30th September 1998 and must be completed by February 2000. It remains, therefore, at a preliminary stage with all parties still exploring each others' positions. The European Union's priority objectives are poverty eradication and the integration of the ACP states into the world economy. Issues that are likely to prove significant include the future trade arrangements provided by the convention and ways in which European Community development co-operation can be made more effective.

My Lords, while I thank my noble friend for her reply, does she agree that if poverty eradication is an objective it is, to say the least, disappointing that the Commission's Agenda 2000 and the financial perspectives for the years 2000 to 2006, far from targeting the poorest countries of the world, target middle income countries? Will this issue be addressed n the negotiations and the needs of Asia and sub-Saharan Africa, for example, be reasserted? Further, can my noble friend assure the House that in these negotiations the Commission's preoccupation with free trade agreements will be challenged? As the Commission's own evidence indicates that these are usually unfeasible and not very helpful, does not the real challenge remain to enable the poorest countries of the world to begin participating in a meaningful way in the world economy?

My Lords, I believe that the questions raised by Agenda 2000 are largely matters of internal reform. My noble friend is concerned about the position of the European Union in regard to aid. I remind my noble friend that the European Union wants to rationalise and simplify aid instruments in order more effectively to encourage economic growth and to reduce the dependency culture. It is enormously important that there is sustainable development in the programme that we put forward and that the ACP countries can expect more advanced notice of the resources that they will receive to help them in turn with forward planning. My noble friend is worried about the free trade areas. The free trade areas will be introduced after a roll-over period of five years under the World Trade Organisation waiver. But I stress to my noble friend that impact assessment reports on the free trade areas are currently being studied by the European Union.

My Lords, while I welcome the observations of the Minister about trade in the post-Lomé negotiations, can she enlarge on what role she sees private enterprise playing in this development?

My Lords, the European Union position in the Lomé discussions is concerned with industrial development and ways in which ACP countries' trade can be encouraged. The questions involve not only industrial development but structural reform programmes. There is also concentration upon the contribution that the private sector can make to development in those countries. Based on my own experience, I believe that Her Majesty's Government have made a very great effort in regard to private sector investment in the countries of the Caribbean.

My Lords, is it not a fact that the Secretary of State for International Development has raised very serious doubts about whether the British aid contribution, a third of which is administered by the European Union, is properly directed? Does my noble friend agree that much of that money goes to relatively rich countries while poorer countries, particularly those in Africa, do not get the support that they need and deserve if we are to bring them properly into the world community?

My Lords, it is concerns such as those voiced by my noble friend and my right honourable friend the Secretary of State for International Development that have led the European Union to support the target of halving the proportion of people who live in extreme poverty by the year 2015. European Development Fund projects have a very important part to play in achieving that aim. My noble friend's point is well taken, not only by my right honourable friend, who has managed to persuade our European partners that they should also be looking at this question, as they are.

My Lords, what part is played in the negotiations by the development needs of the Caribbean banana producers?

My Lords, we have been discussing for the past 18 months or so, at virtually every level of government, the needs of the Caribbean banana producers. As we know, the needs of those banana producers have taken something of a blow in recent weeks. I am glad to report that since we last discussed the issue in your Lordships' House the WTO agreed on 29th January that we shall have a further month of negotiations. It is an enormously important issue. There was some consensus in your Lordships' House that if the banana producing countries of the Caribbean are not allowed to continue with that legitimate trade, the temptation to diversify into some forms of illegitimate trade may become very great.

My Lords, I agree totally with the Minister. Given the close link between CAP reform and trade proposals for the new convention, what assessment have the Government made of the impact of such reform on the economies of the ACP states? What steps are they taking to ensure that the European Union faces the consequences of its agricultural policy for the ACPs?

My Lords, those are questions which were dealt with when drawing up the position of the European Union for the Lomé discussions. They were considered before the negotiating mandate was arrived at. The negotiating mandate has now been published and the negotiations are going forward. So those points were taken into consideration in getting the European position together before the negotiations with the Lomé countries began towards the end of last year.

Regional Development Agencies: Boundaries

3.1 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In so doing, I declare an interest as President of the Southern Tourist Board.

The Question was as follows:
To ask Her Majesty's Government whether they regard it as desirable for the boundaries of the new regional development areas to coincide with those of the regional tourist boards.

My Lords, the boundaries of the regional development agencies, which were approved by Parliament in the Regional Development Agencies Act 1998, match those of the Government Offices for the Regions. It would be sensible for the boundaries of the regional tourist boards to be aligned with those of the RDAs. It is for the regional tourist boards themselves to determine their own regions as they are not government bodies.

My Lords, I thank the Minister for that helpful reply. First, in view of the significance of tourism for the creation of employment, will the Government ensure that the needs and potential of tourism are fully recognised by the RDAs, and that those interests are represented on their boards? At present, they are conspicuously absent.

Secondly, how will the Government ensure that important tourist attractions and destinations are not disadvantaged when the RDA boundaries within which they are located exclude the area in which they are best marketed for tourism? I refer, for instance, to Bournemouth which would like to stay in the south and not be in the south-west.

My Lords, I cannot accept that tourism is not represented on regional development agency boards. Tourism is not represented on all the boards but there is representation where it is an important part of the regional economy. If there are examples where tourism should be more widely represented, I should be glad to hear of them.

It is for the regional tourist boards to determine their own regions. In Cumbria, for example, a separate tourist board would rather be linked with the north-east than with the north-west. It would be sensible for it to maintain links with both boards which might have common interests with it.

My Lords, the Government assured this House that the boundaries of the RDAs were not to be "fixed in stone for all time". Will the Minister assure the House that the existing administrative regional boundaries will not be used as a fait accompli to prevent the boundaries for any future English development agencies being fixed by the Boundary Commission after full and proper consultation with the public?

My Lords, I am not sure that I understand the noble Baroness's reference to "English development agencies".

My Lords, clearly I should have read my notes. However, one is always frightened because Members yell "Reading, reading!". I refer to English regional assemblies.

My Lords, the Government have always resisted blandishments from the Conservative and Liberal Democrat Front Benches to anticipate what the boundaries of democratically elected English regional assemblies might be. We have resisted the temptation to assume that they would be the same as those of the regional development agencies because clearly it is of enormous democratic importance that regions in this country should determine their own boundaries by agreement.

My Lords, the Minister seems to imply that the Government support the introduction of regional assemblies in the English regions outside London. If that is so, can the Minister give some indication of when we may see some progress, if only to give the democratic support which the RDAs will need in order to maximise the economic potential of the English regions?

My Lords, government policy has not changed since we stated in our manifesto that the prerequisites for democratic regional assemblies in England would be the wishes of the local authorities and the wishes of the people in the region. That position has not changed. The justification for regional development agencies stands on its own legs in the sense that those are business creation economic regeneration organisations designed for a country where only London is a region with GDP per head above the European average.

Health Bill H L1

3.6 p.m.

My Lords, I beg to move that this Bill be now read a second time. The Bill provisions make a number of important and wide-ranging changes to improve health and the treatment and care provided to patients on the National Health Service.

The origins of the Bill are the Government's White Papers in England, Scotland and Wales, published over a year ago now, to rebuild a modern and dependable National Health Service, based on the fundamental and historic principle that if you are ill or injured there will be a National Health Service there to help, and that access to it will be based on need and need alone—not on one's ability to pay, who one's GP happens to be, or where one lives.

Before I go into the detail of the Bill, it may be appropriate to record now the sorrow that I am sure is shared throughout the House at the news of the death today of the noble Baroness, Lady Robson. She made a great contribution to healthcare in this country and to debates on healthcare in this House both from the Back and Front Benches of the Liberal Democrats. I feel sure that she would have been particularly interested in the debate today with its aspects of professional self-regulation, given her contribution to the professional performance legislation in 1995. I am sure we shall all miss her.

My Lords, the White Papers on which the Bill is founded received widespread support. That is because they go with the grain of what many in the NHS had been trying to do despite the obstacles presented to co-operative working by the internal market. In our proposals now we are discarding the things that failed and building on the things that worked, such as the increasingly important role of primary care, and we have backed these proposals with the biggest cash injection the NHS has seen in 50 years.

Good early progress has been made in implementation. A great deal has already been done without the need for primary legislation. And, as we promised, we have developed our proposals through dialogue with the NHS, with users, carers, professional bodies and others. This dialogue and discussion have helped shaped the Bill now before the House.

Before running through the detail of the provisions, I should like to highlight three critically important White Paper themes which the Health Bill takes forward: first, that there has to be a new and systematic approach to improving the quality of services in the NHS; secondly, that the NHS needs to work together and in partnership with local government, with voluntary bodies and within the community—it is everyone's business to improve health and healthcare; and, thirdly, that responsibility should be devolved to local clinicians to give them a stronger role than ever before in shaping services, getting the best out of NHS resources and promoting the health of their local communities.

Your Lordships will have seen the Explanatory Notes to the Bill, and rather than replicate these, I shall aim to give some detail of the policy intentions behind the provisions. The debate today will, I suspect, focus on the provisions in Part I which will apply to both England and Wales. Later this year, broad responsibility for the NHS in Wales will transfer to the National Assembly. Devolution provides a tremendous opportunity for the NHS in Wales to be shaped so as best to meet the needs of the people of Wales.

Part II of the Bill contains provisions which will apply only to Scotland. I am pleased to see that several noble Lords with Scottish interests will be speaking later today. I am equally delighted to see that my noble friend Lord Macdonald of Tradeston is on the Front Bench and will listen, as I shall, with particular interest to their contributions.

My Lords, before the Minister leaves that point, perhaps I may ask why Part II is in the Bill at all. Before the Bill becomes law, in 88 days a Scottish Parliament will be elected. Two months later it will be entirely responsible for health. Surely, the right and proper course would have been to leave these important matters to be discussed and decided by the Scottish Parliament later this year.

My Lords, I believe that the right and proper course was to ensure that progress on the White Paper in Scotland was not impeded by further delay. It was well received and there is a desire both north and south of the Border to take forward the important issues of quality and professional self-regulation, an issue which is reserved for the UK Parliament. Progress can then he made in Scotland as well as in England and Wales.

My Lords, I am grateful to my noble friend for giving way. Is not the position that the new acute and primary care trusts in Scotland come into operation on 1st April? The Government need legislation to abolish the existing trusts and to set up the new trusts, otherwise they would be subject to legal challenge. I am absolutely astonished that a former Conservative Health Minister does not even begin to understand that point of view.

My Lords, my noble friend has detailed knowledge and experience of the work of the health service in Scotland. Perhaps I may return to the provisions which will apply only to Scotland. Many of them are similar to Part I of the Bill applying to England and Wales, but there are also differences in the proposals for primary care and the quality agenda is being tackled differently. The distinctive approach in Scotland recognises the different history and starting points north and south of the Border while maintaining the coherence of a National Health Service across the United Kingdom, which I am sure noble Lords in all parts of the House will wish to see preserved.

I turn to the detail of primary care and deal first with fundholding. Primary care groups and trusts build on the work of multifunds, GP commissioning groups, individual fundholders and total purchasing pilots. They develop the potential of primary care commissioning, but without the disadvantages of individual fundholding which has been a bureaucratic and costly system, has allowed service development to take place in a fragmented way, has artificially separated responsibility for emergency and elective care, and has given advantage to some patients at the expense of others.

We are therefore ending standard and community fundholding on 31st March this year, through regulations which were laid yesterday. A much reduced residual scheme will then operate until Sections 14 to 17 of the National Health Service and Community Care Act 1990 are repealed at the earliest opportunity after Royal Assent by Clauses I and 36 of the Bill.

I turn to the new arrangements. Primary care groups and local health groups in Wales will be responsible for improving the health of their local communities, commissioning an increasing range of services, including emergency as well as elective care, and developing high quality primary care services. They will cut bureaucracy, and for the first time in the history of the NHS the primary care professionals who do the majority of prescribing, referring and treating will come together to ensure the best use of resources to benefit patients.

Primary care trusts take the primary care group model further. They will be freestanding statutory bodies, with additional freedoms and responsibilities. They will be able to employ staff and own property and they will have rights and liabilities. They may also become providers of healthcare, a function currently performed by NHS trusts, allowing the integration of primary and community health services in a way that has never before been possible.

These freedoms will give local clinicians opportunities to innovate and transform services, extending choice and convenience for patients, for example, through more use of convenient day surgery in health centres close to home; joined up healthcare offering treatment, advice, physiotherapy and chiropody all on the same site; and wider health partnerships with GPs teaming up with dentists, opticians and pharmacists to provide a complete package of health services from one complex.

My Lords, my noble friend has referred to chiropody. As she knows, the Society of Chiropodists and Podiatrists is concerned that the Bill lacks specific mention of protection of titles and any definition of the future regulatory regime. The society believes clarification on both to be necessary if the Government are to achieve their aim of professional self-regulation. What can she say to reassure them?

My Lords, I know of my noble friend's association and interest with the Society of Chiropodists. When I come to the subject of professional self-regulation, I shall pick up some of the points that he has made, which I know are of concern. I hope that those concerns can be allayed.

Many primary care groups are keen to take the steps to trust status. A large number have already expressed interest, and we hope to establish the first PCTs by April 2000. The Bill will enable us to meet that demand.

I was surprised to see the reasoned amendment tabled yesterday by the noble Earl, Lord Howe. We have approached the drafting of these provisions with two simple goals: first, to allow flexibility for primary care trusts to evolve in the light of experience; and, secondly, to integrate primary care trusts firmly within the existing system of NHS law. Primary care trusts will receive most of their functions from health authorities. These functions are mainly provided under Part I of the 1977 Act. This has a very flexible structure. The functions for health authorities are currently set up in secondary legislation. We are simply mirroring that approach. If the noble Earl looks back to his own Government's 1990 Act he will see that the functions of the NHS trusts were set out in a way similar to the approach we are taking for primary care trusts in Clause 4 and in a lengthy Schedule 1.

Obviously, the Delegated Powers and Deregulation Committee will consider our approach and we shall look carefully at its comments and recommendations. However, I am confident that the Bill sets out a practical and wholly appropriate legislative framework for taking on this task.

I turn to raising the standards of quality in NHS care, which are at the heart of the Government's drive to modernise the NHS. All patients who are treated on the NHS want to know that they can rely on receiving high quality, safe, and effective care when they need it. And, overwhelmingly, they do receive it. We recognise that there is much good practice to build on. But there have also been some serious lapses, and when they have occurred they have harmed individual patients and dented public confidence. New and systematic action is needed to raise standards and ensure that high quality care is provided consistently.

In July we set out a package of clear and coherent proposals in the consultation document A First Class Service, and these have been warmly supported. Our quality programme comprises three strands: setting the national framework; ensuring systematic local delivery; and monitoring to ensure that the standards of quality we all want are being met. We are making real headway in implementing these. In parallel with the Bill we have laid regulations to set up the national institute for clinical excellence as a special health authority, and our first national service frameworks will be published this spring.

The Health Bill contains a number of key provisions in this area. Clauses 14 to 17 and Schedule 2 will establish a new external body, the commission for health improvement, to provide independent expertise to strengthen NHS action to assure and improve quality and tackle local service problems. The commission will be an independent England and Wales NDPB, at arms' length from but accountable to the Secretary of State in England and the Assembly in Wales. There are separate arrangements in Scotland which are also designed to help monitor and ensure quality standards.

The commission will support the development of clinical governance in a way that sustains and improves the quality of services, and ensures that fewer problems occur in future. Where local efforts are unable to make a difference in tackling serious problems, the commission will provide the NHS with access to the skills and expertise needed for rapid action to put those right.

One of the areas of the Bill which I am certain will be of particular interest in your Lordships' House and indeed to which reference was made in our debate last Wednesday on the Stale of the National Health Service is the subject of professional self-regulation—an issue raised by my noble friend Lord Morris of Manchester.

We have been exploring with the professions the regulatory bodies and others how best to modernise and strengthen the existing systems of professional. self-regulation to ensure that they are more open, responsive and publicly accountable. Patients need the assurance that the people to whom they are entrusting their care have been properly trained and continue to maintain high standards. But recent events have dented public confidence. The professions recognised and are responding to this, and have made a wide range of proposals to update their legislation.

The systems of self-regulation are set out in a number of separate Acts. These make provision which, with very few exceptions, may be changed only by means of primary legislation. The Government are constantly being asked by the professions to make such changes. But there is little prospect in the congested parliamentary timetable to find time to make these changes if a new Bill is required each time. To break the logjam we have concluded that we should take a power, set out in Clause 47 and Schedule 3, to enable existing regulatory systems to be modified and new professions regulated by order.

The Government have discussed the detail of the measures with the professions, and continues to do so. We have been driven by three main considerations. First, it is vital that we find a way not only of tackling the backlog of amendments to a number of Acts, but also a way of making substantial changes to meet the clearly articulated aspirations of the Professions Allied to Medicine; and also a number of professions that are currently unregulated by statute.

Perhaps I can say to my noble friend Lord Morris of Manchester that the question of title, which is one of the matters that is important to the professions, is covered in paragraph 1 (d) of Schedule 3 and there is a clearly laid out framework on the face of the Bill which provides safeguards as to what the power can and cannot be used for. Perhaps I can come to that in a moment.

I turn now to nurses, midwives and health visitors. I know that for them one of the frustrations in approaching these issues has been that the Government have been in the process of considering the review of the Act governing their self-regulation. I am pleased to announce today the publication of the independent review of the Nurse, Midwives and Health Visitors Act, which recommends new legislation to replace the current arrangements. The new arrangements will be designed to acknowledge and strengthen the accountability of practitioners; strengthen the involvement of users and employers in the processes; and put public protection explicitly at the heart of regulation.

The report recommends, and we accept, that the current dual regulatory structure of a council and four national boards be replaced with a new UK-wide body, with ultimate responsibility for regulating the professions, but national arrangements may be made in respect of some functions previously carried out by the boards. The Government have, however, decided not to accept recommendations relating to health visitors, who will continue to be a separate profession. We shall be bringing forward an amendment to the Bill to repeal the current Act once the new arrangements are in place. A circular giving a more detailed response, and inviting views, will be issued later this week.

The second consideration in framing the order-making power is that we must also be clear what the power can and cannot be used for. We have sought to give categorical assurances to the regulatory bodies on a number of points on the face of the Bill. The schedule leaves no doubt that all matters that are central to self-regulation must remain with professional bodies—keeping the professional register, setting standards of eduction for entry into the profession, provision of guidance on standards of professional conduct and performance and fitness to practice procedures.

Thirdly, the power must clearly be subject to appropriate levels of parliamentary scrutiny through procedural safeguards, and we have specified on the face of the Bill requirements for consultation, publication of draft orders three months before they are laid, and affirmative procedure.

It is very much the Government's hope that we can work constructively and successfully in partnership with the professions on this issue. This power is not about dismantling self-regulation. We share the common aspiration to strengthen, not weaken, that self-regulation.

The third key strand of the Bill is partnership. Services need to be built around the needs of the people who use them, not the organisations which provide them. Too often the structural boundaries between services have been a major obstacle to getting the right services to the right people. In the discussion document, Partnership in Action, we set out our plans to make partnership a reality by updating existing systems, removing existing barriers and introducing new incentives for joint working. I am pleased to say that the warmth with which those proposals were received clearly shows that our plans go with the grain of what both the NHS and local authorities are seeking to achieve.

Clauses 19 to 25 contain a package of measures to put partnership working central stage. Clauses 19 and 20 provide updated and extended duties of co-operation covering all NHS bodies and their local government partners. These are backed by practical measures. Health improvement programmes will bring together all the local players to improve health and health services, and tackle inequalities. The Bill gives them statutory underpinning in Clause 21. It also provides in Clause 6 for new incentives for those health authorities which, with their local health partners, make greatest progress on this.

The Bill takes new powers to break down barriers, not just between health and social services, but between the NHS and wider local government, through greater flexibility over the transfer of funds and over operational arrangements such as pooled budgets, where this will best improve health. The Bill sets clear expectations for partnership working and offers local organisations and staff new ways to make this a reality, with scope to shape local arrangements round the needs of patients and communities.

These clauses set out a framework within which all local organizations—including, for instance, voluntary and patient organisations within the context of health improvement programmes—can work together to improve the health of local people. The new provisions will provide space for health services and local authorities to think more inventively; to develop innovative solutions to long-standing problems; and to use local resources in new and imaginative ways. They complement those in the Local Government Bill which will introduce the duty of best value for local authorities and enable the Government to remove obstacles to joint working.

Before I conclude I should outline a number of other important provisions in the Bill relating to NHS trusts, high security psychiatric services, the Pharmaceutical Price Regulation Scheme and fraud. Turning first to NHS trusts. Clauses 8 to 12 and 43 to 45 modernise the framework within which NHS trusts operate. The Bill leaves in place the devolved responsibility that trusts need to enable them. and their staff to get the most out of NHS resources for their patients. But it sets this firmly within the context of trusts' role within the wider national health service.

Clauses 10 to 12 and 43 to 45 simplify the trust financial regime to reflect better the status of trusts as public sector organisations, rather than trying to imitate a commercial business structure. Aficionados of the NHS trust financial regime can find full details in the Explanatory Notes. Clauses 8 and 37 update the arrangements for trust establishment orders to give them greater flexibility when dealing with their estate.

Clause 34 fulfils our commitment in Modernising Mental Health Services to enable high security special hospitals to be constituted as NHS trusts, to promote better integration of secure provision.

I turn now to pharmaceuticals. We are committed to renegotiating the pharmaceutical price regulation scheme and are currently conducting negotiations with representatives of the industry. We consider that a voluntary scheme which is clear and fair is the best way of working, and this view is shared by the industry. But fairness has to mean that everyone complies with the agreement and companies in the same situation are treated in the same way.

Unfortunately, this is not thought to be the case with the current agreement. One major company has refused to submit financial returns since 1990 and resisted all approaches to comply. Over the past year 24 companies have increased product prices without the department's agreement, at an estimated cost to the NHS of £30 million. That is at the expense of other NHS treatment and care.

If action is not taken to secure compliance, there is a risk that the scale of losses will increase. It is the Government's duty to ensure that the NHS gets a fair deal. It also helps the pharmaceutical industry if everyone knows that there is a clear, fair and universally applied arrangement. In the long run, it makes it possible for the Government to run such matters with a much lighter touch.

The powers in Clauses 26 to 31 will enable the Government to ensure compliance with aspects of a new agreement which would be the result of full discussion with the industry. Perhaps I may use medical terminology here and say that we are talking about informed consent. So they will not significantly affect those companies committed to complying with the agreement, but they. will secure compliance from any other companies. In the ongoing negotiations we are committed to finding a fair deal for the NHS and a fair deal for the pharmaceutical industry. We believe that it is possible to put in a place a system which delivers these objectives, and which ensures that this country continues to be in the forefront of research and development in this area.

Also included in the Bill are new powers to tackle fraud against the NHS by patients and family health service practitioners, to cut down exploitation by a small minority at the expense of the great majority of honest NHS patients and practitioners. We need to ensure that NHS resources are spent where they should be, on patient care. The new powers will help underpin the strategy set out in Countering Fraud in the NHS, published in December 1998.

This is an immensely important Bill. It will deliver the far-reaching changes that are necessary to underpin the development of the health service into the next century. I am sure that we shall have detailed discussions on its provisions in your Lordships' House. I look forward to them. I commend the Bill to the House.

Moved, That the Bill be now read a second time.—(Baroness Hayman.)

3.33 p.m.

rose to move, as an amendment to the Motion, That the Bill be now read a second time, at end to insert "but regrets that neither the definition of a Primary Care Trust nor any adequate provisions relating to the functions, powers, responsibilities and structure of such are contained in the Bill; and calls upon Her Majesty's Government to amend the Bill accordingly."

The noble Earl said: My Lords, the House will be grateful to the Minister for introducing the Bill with her usual clarity. We have before us a very radical Bill. It is a Bill that must surely qualify as the flagship of the Government's health reforms in the current Parliament. To the regret of all on these Benches, it is a Bill that seeks to undo much of the good resulting from the work of the previous administration. But that is not the only reason why we believe that this is a deeply flawed Bill. It is presented by the Minister as heralding bold, new initiatives designed to improve the quality of healthcare across the board, to eliminate unfairness and to pare down NHS bureaucracy. I wish it were that straightforward.

In my remarks today and at subsequent stages of the Bill, I shall seek to show it up in its true colours, as a measure that, far from providing a platform for improvement, will instead be a recipe for inflexibility, inefficiency, lack of choice and, perhaps above all, tight central control of our wealth service by politicians in Westminster.

The previous Conservative government introduced GP fundholding. This Government now want to abolish it. Why? The benefits and success of the fundholding system have been recognised by anyone who has ever had anything to do with it. Fundholding has given GPs greater financial and clinical autonomy and, in the process, enabled them to deliver a better standard of care to patients. Efficiency savings have been ploughed back

into shorter waiting times, new specialist services, surgical procedures developed within the practice and improved surgeries and waiting rooms. It is not only Conservatives and fundholders who recognise that; even the Government's White Paper acknowledged that fundholding has enabled doctors to,

"sharpen the responsiveness of hospital services and extend the range of services available in their own surgeries".

The British Medical Association, the Audit Commission and the Organisation for Economic Co-operation and Development have expressed similar opinions. The philosophy is simple: the greater the autonomy of a GP, the better the patient care; and the closer to patients that decisions are taken, the more effectively are GPs accountable to them.

At present about 60 per cent. of patients in the country are looked after by a fundholding practice, leaving 40 per cent. who are not. So, the system has to go. That is a funny sort of logic. It is a logic which should sound a warning bell in all our minds of something that the Labour Party all too often finds appealing: the idea that we should aspire to a levelling down of standards and not a levelling up.

What are we getting in place of fundholding? Primary care groups and, under the Bill, primary care trusts—PCGs and PCTs—representing the most fundamental upheaval in the family doctor service since the formation of the NHS. This is a point to note because it is precisely the reverse of what the Prime Minister promised us. In June 1996 the then Leader of the Opposition pledged to health service managers that,

"there would be no great upheavals".

Those were his words.

But these reforms are, indeed, an upheaval. One manifestation of that is that they will coerce every single general practitioner into a primary care group. The Government have argued that there is no coercion and that PCGs will simply "cover" GPs rather in the manner of a health authority. How can that be a proper description of reality when doctors will have no choice as to whether they are part of a PCG and no choice as to whether and when they give up their budgets and their ability to commission healthcare services?

However, coercion is not the only problem. Of equal seriousness, contrary to all the Government's much vaunted aspirations, are the bureaucracy and inefficiency that look set to be an integral part of the new structure. The PCG/PCT structure is likely to be very costly to administer. Initial estimates vary from £150 million to over £300 million per year, without accounting for start-up costs. That is considerably more than the cost of fundholding and yet the Government have budgeted for savings. Indeed, they have earmarked the money for other purposes.

It is almost a dead certainty that any system that attempts to control the commissioning and budgetary functions of every single GP and involves the co-ordination of a multitude of different bodies and agencies will, by its very nature, be bureaucratic. However, even more disappointing is the prospect of complicated new mechanisms being built into the commissioning process that are bound to result in a health service that is actually less responsive to patient demand, not more.

Let us consider referrals, for example. Long-term service agreements with hospital trusts will dictate where referrals are to go. No longer will a GP be able to shop around for a hospital where waiting times are shorter or care is better. Let us suppose that a hospital consistently underperforms. If a PCT wants to place a new contract elsewhere, it will have to go through all manner of lengthy negotiation procedures with the trust and the health authority. No longer will a hospital feel that it has to be on its mettle at all times in case another hospital captures its business.

What of the GP's budget? There will be no incentive to generate savings at practice level because any efficiency gains will simply be swallowed up by less efficient practices in the same group. What about the creation of new services? The flexibility to create and organise them at local level will not lie with the GP or his practice as it can at the moment. Policies and decision-making will lie with the board of the PCG.

The Government want and expect many PCGs to move towards trust status but the ease with which they will be able to do so may ironically be diminished by their inability to operate at the levels of efficiency that many doctors will wish to attain. The result could be exactly the opposite of what the Government intend.

All that is in the supposed interest of fairness. But when we look at how PCGs are to be organised, we find another irony. We find four possible grades of PCG. Some will be without much autonomy and provide fewer services, while others will have more autonomy and provide more services. It is difficult to take the Government's criticism of two-tier care seriously when what they are creating is a structure that will by its very essence deliver four possible tiers of care, with the quality of that care determined by postcode.

These major reforms have been in gestation for 21 months. The White Paper "The New NHS" appeared more than one year ago. The flagship of the Government's programme of reform in primary care is the creation of the primary care trust, and intended to occupy the highest tier of the ladder in its ability to provide and commission health services right across primary and secondary care and into the community health sector.

Those trusts will control budgets of £60 million or more and involve doctors, nurses, hospitals, local authorities, voluntary groups and many others in the delivery of services. Throughout the Bill, references to primary care trusts abound—not least in the clauses dealing with the duty of quality, the duty of partnership and the commission for health improvement. Yet when we look for a definition of a primary care trust, we find nothing. There is no definition of this new, all-seeing, all-singing, all-dancing creature. The Government have ducked it. The whole bothersome task of devising a definition has been shunted to statutory instruments. The Minister prayed in aid the need for flexibility and cited precedent. For a measure this important, those are not satisfactory arguments. They seem more like excuses for sloppy legislation.

It goes further. We looked in the Bill for an indication of trust responsibilities and board membership—the powers and responsibilities of GPs and other professionals in the management of primary care trusts. We looked for a few critical details about the structure of those bodies. We looked in vain. That information is absent from the Bill. No proper forethought can be given by anybody, least of all your Lordships, to what primary care trusts will mean in practice without an appreciation of these matters. Nor, without some detail in the Bill, can there be confidence about the nature of the proposals. We are entitled to that confidence.

Those are the considerations that underlie the reasoned amendment in my name. Our objections to the Bill spread much wider than the proposals for PCGs and trusts. In last week's debate of my noble friend Lady Gardner of Parkes, I spoke about interference from the Government in clinical decision-making through their attempts to manage waiting lists and through the clinical guidance issued by the National Institute for Clinical Excellence. For all the Government's high-minded objectives on clinical governance, the unspoken subtext is a desire to introduce covert mechanisms that could seriously undermine the clinical autonomy of GPs and clinicians.

Two key parts of those mechanisms are NICE and the commission for health improvement. They should be looked at together. There is a widely shared concern that NICE' s remit will focus as much on controlling expenditure as on clinical excellence. We all understand the desirability of controlling expenditure but that cannot and should not be achieved at the expense of clinical freedom or quality of care.

We all understand the need for responsible clinical audit but CHIMP's. powers of intervention combined with the first cash-limited drugs budget in the history of our health service will exert real pressure on GPs and clinicians to take rationing decisions that they would not otherwise face. Our health service has always had to take decisions on priorities. Whether we call that rationing, prioritising or anything else is immaterial. What matters is that such decisions are taken as openly and transparently as possible. The Bill puts rationing decisions out of sight of the patient while making GPs and clinicians the fall guys if a rationing decision comes out into the open.

If there is a theme to the Bill, it is control of not only doctors' professional judgment but the system of supervision by which that judgment is regulated. There are provisions in the Bill for the Secretary of State to end self-regulation of the medical profession by Orders in Council. Those powers are excessive and unnecessary. The Government argue that they are necessary to make swift changes without the need for legislation.

We all understand the desirability of making minor changes to the GMC and other professional bodies swiftly and easily but the Bill's powers are sweeping. They would enable the Government to abolish the GMC altogether and set up a substitute body under their control. I do not believe that I am alone in finding that deeply sinister. The British Medical Association has described those powers as totally unacceptable to the medical profession and contrary to recent written commitments by the Minister, John Denham. The Government have promised not to abuse those powers. If that is so, why are they needed? Why should we accept as necessary powers that could sweep away without debate in Parliament the ability of doctors to regulate their activities?

The theme continues in the Government's proposals for the pharmaceuticals price regulation system, where they have arrogated to themselves sweeping powers to bring the current voluntary scheme to an end and to control the price of any drug at will. Lower medicine prices are appealing but too much of that will kill the golden goose. The Government say that they will not use the powers widely but if that is done, the policy is bound to lead sooner or later to the withdrawal of products from the UK market and damage to the research capacity of the British pharmaceutical industry. The consequence will be that new products will take much longer to reach British patients. That cannot be right. The Bill's provisions for the PPRS are wrong-headed and excessive.

I see in the Bill the substitution of political control for professional autonomy. I see in the Bill the high-handed use of Orders in Council and the bypassing of Parliament. I see in the Bill voids and spaces where there should be information. I see nothing that does justice to the complexity of the problems in our health service, nor anything that will alleviate those problems. I see instead new, bureaucratic arrangements and new systems for delivering patient care that even family doctors do not believe will improve standards.

I like always to be able to say in your Lordships' House that I do not question the Government's motives for wanting to change our health service. Indeed, change is a fact of life. However, the policies underlying the Bill are not simply misguided. They conceal a government agenda that is designed to obfuscate, not illuminate the basis of clinical decision-making. That part of it makes a bad Bill even worse. Our debates in Committee and at Report stage will provide us with the opportunity to correct some of the Bill's more glaring defects. I beg to move.

Moved, as an amendment to the Motion, That the Bill be now read a second time, at end to insert"but regrets that neither the definition of a Primary Care Trust nor any adequate provisions relating to the functions, powers, responsibilities and structure of such are contained in the Bill; and calls upon Her Majesty's Government to amend the Bill accordingly."— ( Earl Howe.)

3.50 p.m.

My Lords, perhaps I may, first, thank the Minister for her kind remarks about my predecessor as our party's health spokesman, my noble friend Lady Robson of Kiddington. I know that she will be greatly missed in this House, particularly on these Benches. This Bill is one of the centrepieces of the Government's term of office. It is clearly vital in the delivery of their promises on the NHS. Yet the approach adopted for the Bill is interesting. The Government have not taken the opportunity in the legislation to adopt a collaborative and transparent style by which we feel that we can all contribute to the making of the NHS for the next 50 years; instead, they have adopted a dictatorial and opaque style for which they criticised the Conservative government over the 1990 reforms.

The Bill contains unprecedented powers for the Secretary of State for Health to determine vital matters for the health service simply through regulations. Considering the Bill is like being promised a full meal only to be given, on arrival, a voucher for consumption of the meal at a future date. As a result, we on these Benches are, sadly, dissatisfied with virtually every part of the Bill, despite recognising its good intentions.

We welcome the abolition of fund holding. We believe in the goal of a primary care-led NHS and the need to involve all GPs and other professionals, not just some, in primary care planning and secondary care commissioning. We want all localities to be able to innovate, not just a few. However, we have a number of concerns about the creation of the new primary care trusts. Those trusts need to relate to a fully democratically accountable structure for commissioning primary care. The Government are not going far enough in the Bill. As the House of Commons Select Committee said in its recent report, The Relationship between Health and Social Services:
"The Department of Health's proposals in Partnership in Action to allow a lead commissioner and integrated provision are a step in the right direction. However we consider that the problems of collaboration between Health and Social Services will not be properly resolved until there is an integrated health and social care system, whether this is within the NHS, within local government or within some new separate organisation".
We agree. We believe that after stage two primary care trusts have taken effect, residual health authorities should be merged with local authorities on the basis of coterminous boundaries. Under our model, PCTs would still, as currently envisaged, be the commissioning bodies for secondary care but within the overall context of health improvement plans which we strongly support. The rights and duties of the Secretary of State in relation to PCTs should, however, pass to the combined local authority/health authority.

I turn next to the proposed cash limiting of primary care trusts. The new provisions mean that they will be trusts with their own separate identity and a fixed, cash-limited budget for salaries, premises and drugs, which will need to be adhered to. Therefore, there will be no flexibility in the system to cope with crises, such as epidemics later on in the year. In addition, GPs will be caught between the hammer of a cash-limited budget and the anvil of the demands of the national institute for clinical excellence, specifying which drug treatments constitute best practice. They may find themselves very easily in a rationing situation, which is not of their own making. We do not agree that these cash limits should be imposed on GPs' or PCTs' drug budgets.

There is absolutely no detail in the Bill on the issue of the composition of boards. We believe that the mix of those on PCGs currently is not satisfactory. The former Minister of State went too far in appeasing the medical profession. We have the paradox of doctors reported as not wanting to spend time on PCG boards whereas there are members of the professions allied to medicine who would like to sit on such boards but are not entitled to do so. Of course, we recognise the need to maintain the confidence of the medical profession, but chairmanships of PCGs or PCTs should be open to professions other than doctors. For example, why not nurses? Professionals such as community pharmacists and opticians, along with other health professionals, such as physiotherapists, must be strongly involved in building the best possible primary care. The voluntary sector, service users and carers need to be involved. All this should be spelt out in detail in the Bill, but in a flexible way.

Although we support the concept of PCTs, there are no details in the Bill of how individual practices will relate to them. In implementing the new structure, it is vital that individual practices should have enough flexibility and incentive on the one hand to make the best use of resources and, on the other, enough clinical freedom to make

Then there is the issue of the transition from PCGs to PCTs. It appears from the Bill that the health authority or the Secretary of State can determine that a PCG will become a PCT without the consent of the PCG. That is clearly unacceptable. They cannot be press-ganged into the new structures. There must be clear, objective criteria and consultative procedures set out on the face of the Bill before a PCG can become a PCT. There are currently some 60 PCGs indicating an intention of becoming PCTs. They need clear guidance in the Bill as to how that will come about.

I move on to the quality agenda, as set out in the consultative paper, A First-Class Service. If implemented properly, this could be one of the Government's great achievements in relation to the NHS. But, as elsewhere in the Bill, the detail is lacking. Why does the duty of quality set out in Clause 13 not also include health authorities and the primary care groups under them?

Despite the recent publication of a consultation paper on how appraisal by the national institute for clinical excellence will work, NICE remains the spectre at the feast. Will the new commission for health improvement be obliged to enforce NICE's recommendations? Should there not be specific provisions in the Bill about this and about how NICE's decisions are reached? We welcome the setting up of the commission for health improvement, but it must retain the confidence of the clinical professions it is auditing. Ofsted is not necessarily the best model; nor will naming and shaming have that effect.

The commission itself should have a broader remit. It must be able to conduct national reviews on topics determined by it, and not just by the Secretary of State. It should be able to act on complaints made by members of NHS staff and the public and must be able to review the broad aspects of clinical care, not just medical standards. What will the relationship of a commission be to the Audit Commission? There must be a clear limit to the external audit to which NHS institutions are expected to submit. Above all, the commission should have independence, and authority. Perhaps the best model is that of FEM Inspectorate of Prisons. All the reports of the commission should be published.

As I mentioned, the Bill should go much further than Partnership in Action in terms of merging health authority and local authority functions. What do Clauses 19 and 20, which set out a duty of co-operation, mean in concrete practice? Is it just motherhood and apple pie? Why are not other partners, such as voluntary organisations and other bodies outside the health service, mentioned?

We strongly support the institution of health improvement programmes, but we need to have strong community, voluntary sector and carer involvement in consultation on the plans. The requirement and mechanism for this should be specified in the Bill, along with a requirement to publish the plans. As it is, the area of joint working arrangements is unclear. Accountability and consultation mechanisms through health improvement boards need to be spelt out in the legislation, not in regulations. Without that it is inappropriate for the Bill to seek to abolish joint consultative committees.

I turn now to the control of prices. These clauses are a tangled web. The Government seem to be keeping every possible option open. What have the Government now decided on the PPRS? Should they not come clean? There have undoubtedly been abuses of the current voluntary system with price hikes of some well-established drugs of as much as 300 to 400 per cent. On the other hand, the pharmaceutical industry is one of the great UK research and development and manufacturing successes. Although the achievements of the PPRS are not certain, it is clear that the relationship of the industry to clinical research in the NHS has benefited both sides.

We oppose the hybrid scheme under Clause 26 where the Secretary of State can effectively enforce a voluntary scheme. The Government need to choose between either developing a voluntary scheme or developing a statutory scheme. We do not believe that a half-way house is acceptable. We on these Benches are attracted by a statutory scheme, but the Secretary of State has a conflict as both regulator and purchaser. The DTI should perhaps be responsible for the regulatory aspects and for the exercise of any powers under Clause 28. That would tie in with any industrial policy designed to ensure a strong pharmaceutical sector for the United Kingdom. But the terms of any statutory scheme need to be spelt out in the Bill. The current clause appears to allow price control for every kind of medicine whether purchased or prescribed in the UK. Will a statutory scheme be based on controlling prices of individual drugs or the profits of drug companies? What will the provisions be? Under any statutory scheme there should be a duty to consult NICE on cost effectiveness before setting prices.

Of all the areas in the Bill the issue of medical discipline is probably the most oppressive as it affects the livelihood of so many professionals in the NHS. The clause allows the Secretary of State to play not just Henry VIII but the even more malign Richard III if he chooses to. He can override all opposition in regulating the professions and abolish self-regulation entirely. The treatment of the professions is wholly inadequate in the Bill. There is no protection of title specified for any of the professions allied to medicine.

The Bill should specify the key elements of governance and there should be a common procedure across the professions; otherwise, the Government could set up a whole range of new regulatory bodies and transfer functions to them. In particular the advisory committees for each profession allied to medicine which have been suggested should be enshrined in primary legislation as protection for the principle of self-regulation. The Bill should clearly specify the establishment of the council for the health professions and its advisory committees, the continuance of the GMC and the UKCC, the financial arrangements for the councils ensuring independence, the level and limits of lay representation, the: functions of the councils, in particular the power to control entry, keep the definitive register for the professions and remove or restrict registration, and, finally, the reporting link to the Privy Council. Other aspects could be dealt with by regulation. Of course there should be the flexibility to admit new professions by regulation and to change disciplinary procedures. We agree that registration in a profession should be subject to continued competence and that there should be express power for all professional bodies to discipline for incompetence.

We on these Benches support much of the contents of the NHS White Paper and the consultation papers, A First Class Service and Partnership in Action. The Bill contains far less detail than those papers. The Bill is not only a grave disappointment; it is unacceptable in its current form. However, we do not believe that the issues should be dealt with by way of an amendment at Second Reading. The time and the place to consider all the issues I have raised should be the Committee stage. We shall raise those issues in a vigorous fashion at that stage. We shall not support the amendment.

4.3 p.m.

My Lords, this Bill contains several clauses upon which I believe the Government deserve congratulation. However, there are many other matters of fundamental concern to the healthcare professions which give rise to grave anxiety.

Before turning to such fundamental issues, I shall mention briefly several important but less dangerous clauses. First, I note those relating to the regulation of the pharmaceutical industry and the price of NHS medicines. Here I must declare an interest as an occasional neuroscience adviser to a pharmaceutical company. This industry is one of the brightest jewels in Britain's industrial crown, making a major contribution to our balance of payments. Many of the new, effective, if expensive, drugs introduced within the past few years have been discovered tit the United Kingdom because of the excellence of the research and development programmes of such companies. It is crucial that any control exercised by government upon their activities should take full account of the major costs of such R&D and must be exercised with a light hand and with careful consideration of all relevant issues.

When some years ago I chaired a sub-committee inquiry of your Lordships' Select Committee on Science and Technology into international investment in UK science, we found that there was massive inward investment in UK industry— not least from the USA and Japan—largely in pharmaceuticals, because of the strength of our science base. This must not be imperilled. Concern is mounting about the transfer of drug manufacturing from the UK to countries such as Ireland, where low corporation tax makes such relocation commercially worth while.

My comments on primary care groups and trusts, as described in the Bill, will be brief, as many other of your Lordships are better qualified to discuss these. However, I note that the general principle is commended by the BMA and most other professional organisations. The previous system of fundholding—which I supported— and non-fundholding practices gave rise to some anomalies which should ultimately be resolved by such groups and trusts. Despite the proposed boycott by Bosworth doctors, I believe that these organisations will prove to be successful, always provided that there is adequate funding and involvement in their governance by doctors, and probably dentists, nurses and other healthcare professionals.

I also commend the provisions of the Bill relating to the detection and abolition of fraud. However, in passing I must stress the vital importance of confidentiality of health information, not least in relation to the proposed and welcome establishment of the commission for health improvement (CHIMP). Some time ago I introduced a Bill into your Lordships' House to make it a criminal offence for a non-healthcare professional, such as an NHS administrator or the secretary of a doctor in private practice, to disclose confidential information relating to individual patients. That Bill was not pursued because the then government introduced a code of practice to preserve the confidentiality of such information in the NHS. No such control yet exists in relation to the staff of doctors in private practice. I look forward to hearing the Minister's comments on this point.

The amended responsibilities set out clearly in the Bill relating to the authority of NHS trusts and boards are also welcome, provided the voice of the universities continues to be heard, as indeed are those relating to clinical governance, not only through CHIMP but also through the work of the national institute for clinical excellence (NICE), which will be an important parallel development. I am delighted that my former colleague in the University of Newcastle upon Tyne, Sir Michael Rawlins, will chair that body. NICE and CHIMP together should fulfil crucially important roles relating to improving and maintaining high standards of clinical practice throughout the NHS. As the BMA has said, the UK medical profession is fully committed to ensuring the highest quality of care for all patients and to ensuring that doctors play a full and appropriate professional role in systems of self-regulation and clinical governance to achieve this objective, provided always that the necessary resources are made available.

However, I must admit to some anxiety about the additional workload needed to fulfil these worthy goals. The introduction by the previous administration of the purchaser-provider principle, with the avowed aim of enhancing competition between hospitals seemed a brave ideal in seeking value for money, but had several unforeseen and unfortunate consequences. Tertiary referrals to centres of excellence were greatly reduced and research, the lifeblood of medical advance, was also damaged. I trust that the Government will maintain and indeed expand their health R&D programme and will move more rapidly to the projected target of spending 1.5 per cent. of the NHS budget on R&D.

These points are relevant when medical recruitment to the NHS is below target and when those who continue to work loyally and effectively for the service are under increasing pressure. A recent BMJ paper revealed that about 16 per cent. of present day GPs came to the UK, mostly from the Asian sub-continent, in the 1950s and 1960s. Most will retire in the first decade of the next century, by which time the projected increase in medical students will not yet make any contribution to the NHS workload. Incentives persuading doctors to stay in the NHS and not to take early retirement, as so many are doing, are very much needed.

In particular, I must report my concern about the continuing problems of clinical academic medicine. The senior lecturers, readers and professors in clinical departments make a vital contribution to the NHS and many, under pressure from managers, have been required to increase their burden of clinical work in order to bring down waiting lists. Such pressure has inevitably eroded the time available for teaching tomorrow's doctors and for research; hence recruitment into this vitally important field of medicine has shown a serious decline. I trust that the Government are still considering the recommendations of the Richards Report, following the inquiry into NHS research by a sub-committee of your Lordships' Select-Committee on Science and Technology which I was privileged to chair. The continuing involvement of the relevant universities in clinical governance is vital.

While I have commended several provisions of this Bill, I must now express grave concern, which I know is shared, by members of the other healthcare professions, about the provisions in Clause 47 and in Schedule 3 relating to professional regulation. Recently, dedicated, efficient and hardworking doctors throughout the country have been appalled, as have members of the public, by the reported catalogue of errors and/or negligence recently exposed in a number of high-profile cases coming before the GMC and other bodies. The GMC, the BMA and the Royal Colleges are working hard to improve standards of openness and accountability which patients have a right to expect. There has been a fundamental shift in the culture of medicine, and doctors clearly accept the need for transparency about their conduct and professional performance so as to retain public trust. Later this week the GMC will be considering a paper proposing regular revalidation by peer review, in collaboration with the Royal Colleges, of: he standards of clinical performance of doctors in all branches of the profession.

In 1983 Ralf Dahrendorf (now Lord Dahrendorf) said in his Jephcott Lecture to the Royal Society of Medicine:
"I would claim that the English professions are a model of the potential of self-government, of an implied contract with society, and thus of liberty. The alternative—the professions bound by the state—is certainly fearful".
He spoke with authority, recognising the problems encountered in his native country, Germany, where the professions are under direct government control.

Even more trenchantly, the noble and learned Lord, Lord Hailsham, in the Spectator in 1988, wrote on "How to ruin the professions". He said that independent learned professions are the hallmark and glory of a free society, but they must respond to public scrutiny and criticism and must never provide cover for incompetence. How true those comments are still.

A recent MORI poll concluded that 91 per cent. of the public are satisfied with their doctors, and trust them. In striking contrast, politicians scored 30–35 per cent. and journalists 15 per cent. Only nurses scored higher, at 96 per cent.

Soon after I joined the GMC in 1971 the Merrison Commission recommended a major reform of that body in order that it should contain a majority of members elected by the profession, along with some lay members. During my presidency, from 1982–89 we gradually increased the number of lay members and every hearing of the Professional Conduct Committee included two lay representatives. In such hearings, it was my experience that the medical members usually took a more critical view of the behaviour of doctors coming before them than did the lay members. But I soon realised that many doctors appearing before that committee were not guilty of serious misconduct but were showing an inadequate standard of professional performance which some would call incompetence. It was therefore my wish to see that, in parallel with the existing procedures dealing with professional conduct and ill health, a mechanism should be introduced to deal with unacceptable clinical performance. During the distinguished presidency of my successor, the noble Lord, Lord Kilpatrick of Kincraig, the Medical Act was amended by the Medical (Professional Performance) Act of 1995; and the GMC now has appropriate powers to deal with these matters.

But today we are not dealing solely with the regulation of the medical profession but also with the regulation of pharmacists, dentists, opticians, osteopaths, chiropractors, nurses, midwives and health visitors. For some years the GMC, the GDC and the UKCC, have wished to see amendments to their powers introduced in the light of new developments, and in order to give greater protection to the public. But the United Kingdom Government have felt unable to devote the necessary legislative time to amending primary legislation.

Hence, some powers to be conferred by this Bill upon the Secretary of State to amend the functions of these bodies by Order in Council are welcome, provided always that such orders deal with issues other than the fundamental structure and functions of the self-regulatory bodies. An order-making power could therefore secure desirable improvements within existing regulatory frameworks; and the proposals to abolish the Professions Supplementary to Medicine Act and to give the Secretary of State authority to introduce long-awaited regulatory powers over many other professions are also welcome in principle, but details of the Government's proposals are eagerly awaited, particularly since so many other professions haw been seeking self-regulation for many years.

It is to a limited extent reassuring that powers under these clauses will be subject to the affirmative resolution procedure and must be subject, first, to wide consultation with the relevant professions and, secondly, to debate in both Houses of Parliament. However, the powers conferred on the Secretary of State in what is effectively a Henry VIII clause, namely Clause 47 as at present drafted, are in my view excessively wide-ranging. Paragraph 8 of Schedule 3 would enable the Secretary of State to alter fundamental regulatory frameworks established through primary legislation. While Clause 47 could not be used to abolish a regulatory body, it could be used to diminish significantly its powers.

Indeed, it would be Possible to transfer the regulatory functions to another body, provided that it was wholly or mainly made up of members of the specified profession. Hence, the Secretary of State could transfer such functions to a government-appointed body of a few professionals, with no lay or professionally elected representatives. I believe that this is a dangerous position. I also believe that the GMC, the GDC and other bodies are moving rapidly towards restoring and indeed maintaining public confidence in the principle of self-regulation. This Bill, at least in Clause 47 and the relevant schedule, could seriously impair the position.

I remind the Minister that the GMC and other regulatory bodies are at present answerable not directly to government but to the Privy Council. This cherished principle renders these bodies to some extent immune from political interference. How will this Bill affect the position? Similar concerns will no doubt be expressed, and have been expressed, by other noble Lords.

It is paradoxical that when last year we debated the Teaching and Higher Education Bill that Bill as originally drafted contained a raft of Henry 'VIII clauses, granting almost unfettered powers to the Secretary of State over issues such as the discipline and health of the teaching profession. Happily, at Committee stage the Government were persuaded of the crucial importance of expanding the section of the Bill dealing with the powers of the GTC, which proved comparable in the end to those now falling to the professional regulatory bodies in the health field.

Regrettably, therefore, I must conclude that the powers vested in the Secretary of State by Clause 47 and the relevant section of Schedule 3 are draconian and, as at present drafted, unacceptable. We may be assured of the good will of the present Administration, but what of future governments? These provisions represent a major flaw in this measure, and I urge the Government to amend them and leave fundamental issues of the functions and structure of these bodies unimpaired.

4.18 p.m.

My Lords, this Bill, I am convinced, contains proposals for some of the most fundamental and far-reaching changes which our beloved National Health Service has seen in all its 50 years of proud history. I want to concentrate on some of those changes today, but first I should like to say a word about change itself.

There are those who say that what the NHS needs above all is a period of stability— and who could not understand the feelings of those who work in the NHS who have had to cope over the years with reorganisations without number? Indeed, when I was employed in the NHS for 12 years I too used to join with the many staff who said that all they wanted was a period without major change. Since then I have come to realise that, when we are talking about any major service in the public or private sectors, we have to understand that the only constant thing about change is that change itself is constant.

How could constant change not be the case for the health service when we consider what has happened to healthcare in the years since the NHS was established— the change in life expectation from the early sixties to the late seventies; the fall in length of hospital stay from 45 days to fewer than seven; the vast developments in treatments such as laser surgery, day surgery, chemotherapy, and so on; and, perhaps above all, the increase in patient expectations and better informed patients who want to be involved in their own healthcare. Any health service which had not changed rapidly in both the treatments it provides and the way it is organised, would have withered and died long ago.

Most people are resistant to change and anxious about it. There is one change in the Bill to which there will be few resisters, and that is the abolition of the so-called market. This pernicious system—which has set hospital against hospital, doctor and nurse against doctor and nurse; which has actively discouraged the sharing of information and encouraged reinvention of wheels; and which has shamelessly provided better services for some patients at the expense of others—will be mourned by few of those who work in our health service. It is a change which is almost universally welcomed by those who have found that patient care is more important to them than winning some notional competition.

The most welcome change to me—because I believe it is the most welcome to patients—is the provision in the Bill for moving to a primary care-led service. Over the years, much lip-service has been paid to the idea of primary-led. I think I first heard the phrase some 25 years ago—although of course in those days we called it "GP-led" because the term "primary care" to embrace all the people and professionals involved had not yet been coined. Everyone has understood the importance of it as this is where most patients' experience of the NHS actually is. But this has not happened, and hospitals and secondary care have continued to exert a disproportionate amount of influence on the way in which our health service is organised.

The Bill will change that at last. It will, thereby—if we use the opportunities that it gives us properly—bring huge benefits for patients and their families. Staff at the primary care level are the ones who know about local health needs, and it is they who will now be making decisions which ensure that their patients get the best possible care and treatment.

I also welcome enthusiastically the inclusion of a lay member in the new primary care groups. These primary care groups will not only ensure that local services reflect local needs, but will emphasise quality of service and the closest possible linkages between hospitals, general practitioners and community services. The potential for that seamless service—which patients want and need—is there, although of course we must be aware that the system may take time to work effectively for all patients. Those involved in primary care groups will need to develop their skills and, in some cases, to change their attitudes.

Nowhere will this be more important than in the development of health improvement programmes. To ensure that these improvement programmes achieve maximum impact, it is vital that they are developed in consultation with patient and carer groups.

Thus far, the Bill contains welcome provision for consultation with local authorities and other health professionals. It may be useful to consider whether including a duty of partnership and consultation with local and national voluntary organisations who represent the interests of patients and their families would be helpful. Such groups have pioneered new and effective ways of working, and have revealed needs, and ways of meeting needs, which professionals have not perceived, as the Minister has acknowledged in her speech. I have no doubt that the most effective primary care groups will consult such groups—and, indeed, many are already encouraging their lay members to do so—but the Minister may wish to consider extending encouragement to duty. Such a move would certainly help to ensure that patients were able to offer their views in a constructive way, and that they would be involved in deciding what actually constitutes high-quality healthcare from their point of view, which is surely the most important one.

The inclusion of a place for social services representatives on the primary care groups will make an important contribution to that closer working of health and social services which is so vital to patients, and which has been for so long a source of conflict rather than co-operation. In this respect, I must also mention the welcome provision to allow NHS bodies to transfer payments to local authorities and vice versa for health-related expenditure. The Bill also allows two new arrangements—pooled budgets and a lead commissioner of services, which could be either health or social services.

The Government may wish to consider how the charging policies of local authorities will impact on these arrangements. For example, where a service is provided by a health service body on behalf of a local authority, would a person be liable to be charged for that service? That would certainly add to the confusion which already surrounds charging policies and would be a very unwelcome development. I know that the Government intend issuing guidance later this year to ensure that there is more consistency nationally about charging, and I hope that the issue of what is a health service and what is social care will be addressed.

As this Bill passes through your Lordships' House, I believe it is important that we consider it always in conjunction with the many other government initiatives which will impact on our nation's health. The public health agenda, the acknowledgment that healthcare is vitally influenced by poverty, had housing, poor diet and low expectations, the education agenda, welfare reform and specific initiatives focused at particular groups, such as those for older people and the national carers strategy that we heard about yesterday, will also need to be considered. The development of technology, not only in schemes such as NHS Direct, but the computerisation of doctors' surgeries to include the reception of hospital tests results and electronic links between surgeries and pharmacies, will also be important. All these and many more must be taken into consideration in the modernisation of our national health service.

But. in my view, the most important issue of all—the test against which we must judge how these far-reaching changes work in practice—is without doubt this: will they give the patient more opportunity to contribute to the maintenance of his own health and that of his family? I believe that they will.

4.27 p.m.

My Lords, before I enter the debate I should like to declare an interest. I am an executive director of the consultancy firm MJM Healthcare Solutions, whose main client is the National Health Service.

I have a second disclosure. Last week, my much-loved mother-in-law died; her funeral is tomorrow. I have a house full of grieving relatives and I feel that I ought to get back to them. I am torn between your Lordships' House and my family's needs. I feel that I should leave before the end of the debate. I crave your Lordships' forgiveness. I know how cross I used to get as a Minister if noble Lords left before the end of a debate.

My Lords, I can assure the noble Baroness that I will not be the slightest bit cross. I think that she should go home as soon as possible.

My Lords, perhaps I should go before I make my speech.

It is understandable that every new government want to legislate for the NHS. The NHS is probably the most popular institution in this country. It is the one which generates huge concern and it is one of the very few organisations over which the Government still have total control. Its ethic is based on the superb principles of love thy neighbour and each according to his needs; it is a highly-cherished principle. But the price of a tax-based service, largely free at the point of use, means that the Government have carte blanche to meddle. As a result, the poor, dear NHS is subjected to a state of constant revolution, as the noble Baroness, Lady Pitkeathley, has said, perhaps matched only by Chairman Mao and his lady wife.

I understand the temptation. Indeed, I understand the necessity to keep up with social changes, developing technologies, rising expectations, demographic trends. and so on. I welcome the themes that have been outlined by the Minister this afternoon—the continuing emphasis on a primary care-led NHS, quality, partnership and local autonomy.

I thank the Minister for the very clear way in which she introduced the Bill. But I must profess disappointment that when initiatives are shown to be a proven success, embodying the very themes which were outlined this afternoon, they are abandoned for ideological reasons. The independent OECD stated that. contrary to what the Minister said, GP fundholders did a better job of purchasing services than health authorities and were more prepared to diversify, to challenge hospital practices and to demand improvements.

The BMA found that fundholders encouraged consumer accountability and GPs were truly willing to share the decision-making process with their patients. The Audit Commission said that fundholders introduced more services to patients, improved communication with hospitals and were more cost effective in their drug prescribing.

I know that the criticism levelled at fundholding was that it was two-tiered and that some patients received a better service than others but, as my noble friend Lord Howe said, instead of a two-tier system we now have a four-tier system. Primary care groups will not only introduce four tiers of service but will diminish patient choice in that they are statutory and cover much larger areas so that patients will not be able to choose to go to a practice which does not belong to such a group rather than one that does.

I could level a great deal of criticism at the concept of primary care groups, especially in relation to cost and the work which has been done as regards total purchasing schemes which are the nearest that we have to primary care groups. But I have this sinking feeling that, whatever we say today or, indeed, throughout the passage of the Bill, PCGs in principle will remain. Sadly I am resigned to that but I am committed to the NHS and am determined that PCGs as amended, I hope, throughout the passage of the Bill should work as well as is possible.

I ask the Minister—and I shall read Hansard for her reply—what incentives the Government have put into the Bill to encourage PCGs to do well. What are the sanctions if they fail? What will happen if a PCG overspends? Is there a presumption that the health authority will bale it out? If it does so, is that fair to patients in other PCGs within that health authority which will presumably have to pay the price by forgoing services which are due to them?

Neither the Government nor the health authority can lean on or dismiss the chairman or members of the PCG board since they are voted into their positions by their professional colleagues, unlike the primary care trusts whose membership will be appointed. Where are the incentives and the sanctions? Where is the accountability? As I read the Bill, the commission for health improvement has a role of intervention. But what does that mean? It can force prescribed persons to compile reports; but so what? Where is the action and, above all, where are the incentives to do well?

In my experience of running three large organisations, putting the boot in achieves an immediate response but it does not motivate and engender loyalty in the medium and longer term. I share the concerns of my noble friend and those of the noble Lord, Lord Clement-Jones, about primary care trusts. But one hopes that the issues which have been raised today will be clarified early during the passage of the Bill.

My second point is much more important and fundamental. Organisational arrangements, although they make a difference and affect issues of choice, quality, accessibility and effectiveness, are to some extent en passant and ever-changing. But the relationship between the public and the medical profession—the doctor, nurse or therapist—is not. It is fundamental and the very essence of healthcare. Without the confidence and trust of people in those professions, we lose everything. That relationship is the cornerstone, the foundation, on which healthcare is based. Governments are peripheral in comparison. As the noble Lord, Lord Walton, said, a recent opinion poll revealed that doctors, along with nurses, remain the most respected of all professionals. That is no accident. They have worked hard over many decades to gain that respect.

An element which engenders that confidence in doctors is their independence; the fact that it is a self-regulating profession for which, through the Royal Colleges, the GMC and other institutions, standards are set and it is increasingly aware that those standards must be met. It is not the poodle of any political administration. As a recent editorial in the Daily Telegraph stated, peer pressure can be as powerful as any other influence on how professionals behave. But if doctors become mere employees of the state, that could fall away.

No one would wish to defend the situation which arose in the Bristol case or, indeed, in the case of the Kent gynaecologist. From time to time there are of course others who fail in their duty of care. They are not to be protected and their professional behaviour should be exposed and dealt with appropriately. The medical professional can be criticised for being too slow in putting its house in order but I agree with the noble Lord, Lord Walton, that there is no doubt that it wishes to do so and, indeed, is doing so.

When I was a Minister only two or three years ago, with the full support of your Lordships' House, we passed a Bill to strengthen and widen the powers of the General Medical Council. As a result of an inquiry by the Chief Medical Officer, there is now an obligation placed on medics to report cases of incompetence among their colleagues. They are obliged to report those who break the profession's ethical code. The confidential inquiry into peri-operative deaths, the regular review of maternal deaths and, through CESDI, of infant deaths, the introduction of medical and clinical audit and so on—all relatively recent initiatives—are making an impact on standards of care.

But perhaps the most encouraging sign is the obvious willingness of the medical profession itself to go further. The highly respected president of the GMC, Sir Donald Irvine, has shown by his leadership a commitment to make the profession more open; to increase the membership of lay members; and to work closely with them. His whole attitude is one of reform. He has not only thought about change but, through his obvious integrity, he has maintained the confidence of his colleagues and instilled in them a realisation that change is inevitable.

I prefer to see those changes led by the profession. As Sir Cyril Chantler, the Principal of the United Medical and Dental School of Guy's and St Thomas' said recently:
"Medicine used to be simple, ineffective and relatively safe. It is now complex, effective and potentially dangerous. The mystical authority of the doctor used to be essential for practice. Now we need to be open and work in partnership with our colleagues and with our patients".
These are eminent men, men of integrity and substance. They know the business; their intentions are honourable; and quite frankly, I put my trust in them before transient Secretaries of State or Ministers, of whatever political persuasion. I put my trust in Parliament and I shall oppose, along with any other Members of your Lordships' House, any Henry VIII clauses which seek without a full debate to meddle with the regulatory system of the health professions. That should not be an issue decided by the whim of a Minister but should be debated publicly in Parliament, since it is the people's business.

My third and last point concerns the pharmaceutical industry. On the whole, governments fail to see beyond the next PES round and industry and commerce, beyond the next quarterly or half-yearly results. In addition, our manufacturing industry and City institutions have progressively moved into the control of foreign hands. The shining exception is the pharmaceutical industry with its huge investment in research and development, its international business and its vast contribution to our overseas earnings.

In so many ways it is a model for this country, especially as its survival depends on the long term. What is more, it values this Government's emphasis on education. Every industry needs a home market; it needs to be cherished; it needs a constant flow of highly educated entrants with originality of mind and determination. Our record is good. Five of the world's top 20 medicines were discovered by the pharmaceutical industry in the UK.

It is tempting for the Government to see the drugs budget simply as a cost, whereas over the past 40 years advances in the use of medicines have helped to free up hospital beds. If we take the top 12 major diseases alone, admission rates have fallen by half, making an annual saving of £10 billion a year, about double the cost of all NHS medicines.

Other nations realise the value of the pharmaceutical industry to their country's prosperity: that it is a prize worth winning. They recognise that its prospects are boundless. If we shun the industry, if we bring harsh penalties to what after all is a voluntary system—the PPRS, which has been effective in the past—the industry will go to: hose who welcome it and who show it respect. It is of paramount importance that it stays here. We should not invest in education, science and technology only to encourage the brightest minds to emigrate.

The Government must seriously do a long-term cost-benefit analysis in the widest sense and look beyond the next PPS round to the very long term. The true benefits of supporting the pharmaceutical industry will be huge rewards in employment and in the education of our society.

So, while recognising the Government's desire to legislate for the NHS, I hope in the spirit of this House they will recognise the sincerity of those who do not share all their views; who share their desire to improve healthcare but not this way of doing so. As is customary, I among others in the House will seek to amend, to improve, but above all to clarify, since there is much in the Bill which is obfuscated and clouded in mystery. Let the Government live up to their rhetoric when applied to others; be honest, open, and above all transparent in their intentions. I look forward to the Committee and other stages of the Bill.

4.41 p.m.

My Lords, I am sure that the whole House wishes to express condolences to the noble Baroness and her family. I am sorry that she has to leave the debate; we understand why. We recognise her contribution to healthcare in this country under the previous government.

I am a member of the Hammersmith Hospital Trust. Part of that trust was, and still is, Queen Charlotte's Maternity Hospital. Consequently, I came into repeated contact with Lady Robson. I heard only this afternoon, when it was announced, that she had passed away. She is a very serious loss to this House and to our service. I have some wonderful memories of her—not least of her chain-smoking in the corridors of power, an odd thing for someone so totally committed to healthcare. She was a wonderful woman—trenchant, straightforward and honest. We shall greatly miss her.

There are many good provisions in the Bill. The accent is primarily on what has been regarded as the poor relation of the health service, primary care. That is greatly to be recommended. We on this side of the House are very pleased that the Government have focused on that issue. It is very important.

However, it is not entirely clear that the Bill will necessarily always improve standards of general practice. I believe that standards of general practice in this country are among the highest in the world. I cannot think of many other places where general practitioners have such wide experience, such good training, such excellent postgraduate support and continued medical education. That is almost unique to Britain. However, one of the problems is that, of necessity, a general practitioner cannot encompass the whole of healthcare. Therefore, placing too much emphasis on primary care will worry a great number of people in the caring professions.

Also good is the fact that the Bill breaks down the barriers between the NHS and other bodies locally and, to some extent, nationally. As we on this side of the House have repeatedly said, although it is not only a Labour message, improving the care and health of people locally is not really a matter of primary or secondary care. It involves much wider health issues, including the environment, education, poverty and so on. If primary care is to be effective, it is important that we pay attention to those mechanisms within government.

My noble friend the Minister said that doctors should be properly trained. I am extremely worried about that Training depends much more on the structure of the NHS than on any other factor. We do not learn medicine as undergraduates in medical school. I know that from my own experience as a doctor. I see my son, a recently qualified doctor, going through the Cambridge course at the moment. Nothing could be more remote during that training than caring for people. One learns to care for people when one comes into contact with them and becomes responsible for them. Undergraduate training does not prepare one. Training starts after qualification.

I well remember my first training lesson. A patient was brought in unconscious. I diagnosed—as it happens correctly—that she was in a diabetic coma and gave her a massive dose of intravenous insulin. She was at death's door. I then phoned my registrar, who was in the local pub, and told him what I had done. Then I realised that I had given quadruple strength insulin intravenously. That is not the sort of thing you learn as an undergraduate. I was terrified. Fortunately, the patient did not die. It was probably the only thing that saved her. It restored her biochemical balance in the most dramatic way. Those in the biochemistry department said that they had not seen anything like it for some years.

The truth is that training depends on contact with those who have specialist knowledge. That has been the keynote of our health service. I have learnt it, as have all of us, through contact with people who inevitably have a major degree of specialist training. 'That training may be neurosurgery; equally, it may be general practice.

One of the problems with the Bill, as was pointed out by the noble Lord, Lord Walton, is that there is nothing in it that supports academic medicine or training. Those of us who are in the academic sector are seriously worried, particularly those in the hospital and specialist sector, about the consistent undermining of specialist care. I repeat: we must not divide primary and secondary care. We have to work together in the National Health Service. I do not see enough evidence of that in the Bill. I hope that that will be attended to in Committee.

Secondary care cannot be under-rated. Each of your Lordships may, or may not, be cured through primary care. But one thing I can promise is that, when you develop cancer, lung disease or heart disease, or have problems with your prostrate or have breast cancer, all of you will require secondary care, as does every member of the community in the British Isles, indeed of the human community. It is the essence of healthcare.

I am afraid that I must refer to a speech made last week by my noble friend Lord Warner. A disagreement arose about the issue of primary and secondary care. My noble friend seemed to imply that secondary care was in some way elitist, that it was too expensive. It is not. It is all part of the same continuum, and we must never forget that. We cannot undermine one at the expense of the other. They must work together. The NHS depends on both.

I am worried that the Bill may do too little to put right the destruction of secondary care which has occurred over a long time in our hospital practice. There has been fragmentation and loss of specialist referrals to centres that can do the teaching and training. There has been a destruction of our knowledge and teaching base. There is all too frequent conflict between universities and the health service all over the country. It is not a conflict that either wants to see. But it is inevitable, due to pressure on finances.

The noble Earl, Lord Howe, in his excellent speech, made an interesting point that suggests almost a misunderstanding. He said that we must recognise the clinical autonomy of GPs and clinicians. Of course, it is the same thing. We are all clinicians and must work to a common goal. We must get away from the separation.

Primary care cannot entirely get to grips with the complexities of modern medicine. To some extent that is inevitable with high technology, which leads much of our knowledge and practice. We run the risk of making our health service second-rate in international terms if we do not recognise it when we legislate.

There are two gaps in the Bill to which I wish to draw attention. They have already been discussed or have been alluded to in part. One is the composition of the primary care trusts. We are naturally nervous about their structure and composition. I hope that during the passage of the Bill through Parliament we can hear some understanding of how the trusts will be composed. It must be clear. Many of us will seek to ensure proper specialist representation on the trusts in order to achieve local standards of the highest order.

I am sorry to reminisce, but when I started my training in the district general hospital the local consultant—be it the chest physician or the heart physician—felt that he had a responsibility for the local community. If there was a factory locally where people were suffering from chest disease, he wanted to be out there doing something about it. Unfortunately, the structure of the health service has now divorced that specialist care from the local area. If we are to have primary care trusts, we must ensure that they are set up with that aim in mind. Hospitals must play a major part in how the health of the local community is maintained. There must be interdigitation.

The other gap in the Bill is regulation of the professions. We shall come back to it at the Committee stage. I share the concern so well expressed by the noble Lord, Lord Walton, in that respect.

Finally, one point echoes the remarks made by other noble Lords. It concerns the drugs industry, the pharmaceutical industry, which is one of the jewels in the crown of British industry. We cannot get away from that: it is an area in which we lead. What does the Association of the British Pharmaceutical Industry say at the moment? It says:
"The UK is becoming a very hostile environment for the pharmaceutical industry and a very difficult location from which to run a global pharmaceutical business."
We cannot afford to lose that inward investment. It is only one example of where we can have inward investment in the health service. There are many other examples to which we shall return. I hope that some of the issues can be explored carefully during the Committee stage of the Bill.

4.53 p.m.

My Lords, in recent months the noble Lord, Lord Winston, and I have become sparring partners outside, not inside, the Chamber, especially on occasional Wednesday evenings. Today is not a Wednesday and I do not intend to take up the cudgels with him at the moment.

I begin by thanking the Minister and her team in the department in which I had the honour to serve before the split for the most comprehensive explanatory notes on a Bill I have ever seen. They are a model of what explanatory notes should be, not only explaining what the Bill seeks to do but giving the recent history of the particular part of the health service with which we are chiefly concerned today.

The noble Baroness has perhaps realised by now that it might have been wiser, on reflection, not to be quite so explicit. Unexpurgated versions can cause harm. As my noble friend Lord Howe and the noble Lord, Lord Clement-Jones, might have said—indeed, almost did say—what a contrast with the Bill!

For many years all thinking people who work in the NHS have been suspicious of change. The noble Baroness, Lady Pitkeathley, who is not in her place, I am sorry to say, mentioned it. The Minister talked about the Bill going with the grain of developing NHS thought. I was struck by that phrase and wondered whose thoughts she had in mind. We have clearly been listening to different people. It might be described as the attitude of, "Leave us alone and we will deliver." Whenever change is in the air, we hear it loud and strong; we have all heard it. It happened when we changed the control from local government to central government. We heard it in 1976 while working up the National Health Service Act; in the 1980s, at the time of what came to be known as the Fowler reforms; in the 1990s with the National Health Service and Community Care Act, the Health Authorities Act, the National Health Service (Primary Care) Act and now the soon to be Health Act. "Not this time", says the Minister. We shall see.

The changes have come thick and fast and they are getting both thicker and faster. Small wonder that NHS people, both directly and indirectly employed, are becoming fed up. As my noble friend Lady Cumberlege said, governments of all persuasions fail to recognise that the NHS is a vast juggernaut of an organisation. Oh, yes! I know that Ministers—I have done it myself—say that it is the second biggest employer in the world, employing, if that is the word, around 1 million people, a little, but only a little, smaller than the Indian state railways. But they do not consider what that really means. It means that if there is to be a change—whether for better or worse—it needs a long time to bed down because only then will it prove itself—or not, as the case may be. I know only too well that Ministers love interfering. They feel they have to, in order to justify themselves. If I have learnt nothing else during my time in politics, it is that most of the time it is better to see that the existing law is working properly and is obeyed rather than seek to change it radically.

Last week, I had occasion to congratulate the Minister on NHS Direct. That new and expanding service is clearly an advance. But it is not what I am talking about. I am talking about the amazing number of changes that managers in the NI-ES have had to put up with and adapt to. Not just managers either: the changes invariably affect the frontline staff as well. A patient will inevitably get better slower in a ward of unhappy nurses.

The Minister is right about what the health service exists for. What people want it to do is keep them in good health, help them to better health and, when they are ill, ensure them speedy help. Very few worry about how managerially that is achieved. The Bill is a managerial Bill. But will it help patients get what they need? I doubt it will make much difference in emergency treatment. The NHS has always pulled out all the stops there. It is elective surgery that is slow and, as we have heard, getting slower. If GPs have a modicum of control, as they have under the present system, they can try to obtain and often succeed in getting the faster treatment that they, and at least initially only they, believe their patients need.

I could not agree more strongly with the noble Lord, Lord Winston. This interface is absolutely vital. The Government will say that that is happening now. But is it? Waiting lists are reducing but we all know that that is a myth. For the patient, the person who really matters, waiting does not start with the consultant. It starts when the GP says, "I'll book you in with the consultant.".

This is known in some circles as waiting to get on the waiting list. The figure is becoming larger and larger. In the past year from September to September it grew by over 100, 000. That puts the Government's election pledge to reduce waiting lists, that is, consultant waiting lists, by 100, 000 into perspective, does it not? Mind you, they cannot do that Although reduced since the peak in March last year the figure is still almost 150, 000 above that which the Government inherited. What will the Bill do for the real figure? My noble friend Lord Howe is right. How can we possibly tell from such an obscure Bill, unless my noble friend's amendment is attached and accepted? This House always complains of framework Bills. Like the noble Lord, Lord Walton of Detchant, I await the report of the scrutiny committee with keen anticipation.

But I do not want to be entirely negative. My experiences in Northern Ireland taught me that health and social services worked properly as a seamless web (to use a horrible expression) only if they had a communal budget. I do not have time to go into detail. but at first sight I welcome Clause 24 as a step in the right direction, especially if it means, for example, that a hospital trust can unblock beds by paying social services to provide home helps. However, I have the strong suspicion that the money will go only one way. We shall discover that during the passage of the B111. We shall also see whether joint consultative: committees really have had their day or whether the Government are right in saying that Clauses 21 to 23 will do the trick. But that is a detail and this is Second Reading.

In general, I believe that the Bill if, in the main, necessary at all, comes two years too soon. Twenty-one months of thinking is not, as far as I can tell, enough. I hope that the Minister will explain to the House exactly what underpins the framework and the details of the new system that she proposes. I accept that change in the NHS is necessary, but radically altering and not abandoning, as the Government claim, the purchaser/provider split when it has not properly bedded down is a mistake. I hope that we do not all come to regret it.

5.2 p.m.

My Lords, I shall deal with some aspects of primary care trusts and partnership as expressed in the Bill. The Liberal Democrats did not support the creation of fundholding practices by the National Health Service and Community Care Act 1990. In the event, the ability of GPs to commission secondary healthcare and to be innovative in primary care was well demonstrated. But, as we had feared, the competitive and two-tier nature of the scheme resulted in inequality of access to NHS care, as the Audit Commission report of 1996 and the Dowling report on differential waiting times of 1997 confirmed.

We agree with the thrust of the Bill that a single structure for primary care provision and secondary care commissioning as proposed through primary care trusts is preferable to fundholding. Together with partnership proposals, it offers the hope of restoring the national character of the NHS in a way that is responsive to local need. Unfortunately, as my noble friend said, lack of detail in the Bill may hamper the possibility of bringing this hope to fruition. For example there are a number of widespread doubts about how the transition to primary care trusts is to be managed. The changeover will involve a huge cultural shift as well as more down-to-earth considerations such as a requirement for new specialist staff to manage the commissioning process and adequate IT systems to control budget monitoring. As a member of a shadow hospital trust, and later of the real hospital trust board, I witnessed the confusion and waste of resources that resulted from lack of preparation for the role of the new hospital trusts. Only gradually did useful packages of software become available and hospitals understand that they needed skilled contract negotiators to manage their end of the commissioning process. Only gradually did they become capable of detailed monitoring of the budget to avoid a financial crisis in July of every year.

While some former fundholders will no doubt bring commissioning expertise into the PCTs, others may not contain a nucleus of expertise in these areas. Since each is likely to be managing a cash-limited budget of some £60 million or more against a background of ever-increasing demand, we simply cannot afford a long process of self-education through error as happened to an extent in hospital trusts.

Another difficulty that the Bill does not appear to tackle is that GPs in PCTs will be both purchasers and providers of care. They will be both commissioners and suppliers. I do not know the correct terminology, but no doubt I shall learn during the progress of this Bill. Experience of social services departments as they have sought to deal with the problem via reorganisation of their staff indicates that it is not always easy for individuals to straddle both roles. Will the Government provide guidance to general practitioners and other health workers in primary care as to how they should handle this problem?

A related point that concerns a number of professional bodies is whether, and if so how, the GP's status as an independent contractor is affected by membership of a primary care trust board. A further point is that community health councils and others associated with users and the interests of the community at large are also concerned by the absence of requirements imposed upon trusts to consult and co-operate with the local community. For example, the noble Baroness, Lady Pitkeathley, highlighted the potential value of a statutory obligation to co-operate with the voluntary sector. I agree with her.

Under the Liberal Democrat model for a joint health service/social services structure that is governed by a democratic organisation, the role of the CHCs would be redundant. However, the Government are not adopting that approach and so the question remains as to the future role of CHCs.

A related concern, which is very relevant to the needs of elderly patients among others, is that the role of therapists is not always sufficiently valued by the medical profession and that the number of such therapists is insufficient to meet the needs and demands of patients and clients. Do the Government see a role for the professions allied to medicine within the primary care trusts? What efforts will they make to encourage more people to enter the professions? Will the lack of input from the related professions on PCG boards be tolerated with respect to PCTs?

In relation to partnership, there is a general welcome for the duty placed on all parts of the NHS to co-operate with one another in exercising their functions under Clause 19, and the new duties imposed upon NHS bodies on the one hand and local authorities on the other to co-operate with one another under Clause 20. Of course, aspiration is not the same as action and there is much detailed work to be done on putting this into practice. Many kinds of organisation appear to be excluded from the requirement to co-operate. It is not unreasonable to be cautious about the ease with which this co-operation can be achieved in practice. The culture of social services differs from that of housing and education departments on the one hand and from the culture of the health service as a whole on the other. I carry the scars of that culture clash, which I acquired when I served on both a county council and a hospital trust board and was treated by both sides with all the enthusiasm that is generally meted out to a messenger.

To take but one example, how is the problem of the charge/no charge culture to be solved in practice? While the organisation of care of the elderly, for example, may be improved, how can we be certain that the level of care will be similarly improved given cash-limited budgets? All of the organisations involved will be working to cash-limited budgets. We have seen how the ideals of care in the community have been sullied by the need to prioritise care only for the most dependent clients under the pressure of cash-limited budgets. Yet how can this need to prioritise help those who could benefit by early assistance in the struggle against dependency?

Of course GPs faced with their cash limits may find innovative ways to provide suitable care for patients outside the expensive hospital environment. However, I must be careful. I note that the noble Lord, Lord Winston, has left his place; nevertheless I take his argument seriously. Are the Government relying on those innovative mechanisms to solve the problem of the growing cost of care in the community?

Some have welcomed the possibility that money can move from the NHS into local authority schemes. But do the Government plan to allow mutual commissioning of services between local authority and NHS bodies? That is not possible currently but it could be useful. Is that one of the provisions to which the Minister referred when mentioning the Local Government Act?

Finally, although we cannot support the unusual amendment to today's Motion moved by the noble Earl, Lord Howe, I wish to emphasise our dislike of the lack of detail in the Bill and the proliferation of secondary legislation that will therefore ensue. Secondary legislation is the bane of our current legislative process. It represents the exaggerated power of the Executive over the legislature in our constitution. I am sure that the lack of detail in the Bill will be challenged by many and will form part of the staple fare of consideration of the Bill at Committee stage and later. Perhaps the Government should remember in this time of constitutional upheaval the effect in another turbulent era of the cry, "The power of the king has increased, is increasing and ought to be diminished".

5.11 p.m.

My Lords, a debate today on a public health Bill is to be warmly welcomed. Those who have taken part in the debate have made major contributions according to their expertise and knowledge. The combined knowledge and experience of your Lordships will contribute to foreseeing the consequences of the Bill—whether or not for the benefit of the public.

Those of us who have seen at first hand the work of the NHS in recent years at some of the teaching hospitals in London have been immensely impressed by the high standards of the doctors and staff employed. Many, in particular nurses, are temporary staff employed due to shortages. Their services have been impressive and have contributed to the high standards in the hospitals. They are irreplaceable.

The proposals in the Bill and in the White Paper setting out provisions published in December 1997—it is already over a year ago—give some cause for concern as well as reassurance. There is reassurance where improvements to the system, quite rightly, are proposed; and concern where improvements are being replaced by radical reorganisation with an increase in time spent on organisation and discussion rather than on patient care.

Retention of the separation between planning of hospital care and its provision—thus ensuring the improvement of health, meeting healthcare needs of the community, and ensuring that the local health service is built around the needs of the patient—is to be warmly welcomed.

Building on the increasing importance of primary care, it is made clear that the community nurse or family doctor represents most of the contact that patients have with the NHS. However those factors will be affected by the imposition of health improvement programmes which, according to the new proposals—I refer to paragraph 2.11—will govern the action of all parts of the local health service to ensure consistency and co-ordination. I ant always hesitant to use such words because they seem to have different meanings for different people.

No doubt there will always be some example of failure to provide high quality care. That has already been mentioned. But we want to be sure that the service available under the NHS is aimed at achieving the highest standards of care. It is stated that the aims of the new NHS will be to treat patients according to need and need alone. I wonder whether that will be the result of the Bill. We note the capping of management costs which will affect the possibility of ensuring those standards; and the limits imposed on the financial duties of primary care trusts. Those are two examples where there is no guarantee to meet the expenses which may be involved.

Confusion over the current waiting lists and so-called non-waiting lists, to which reference has been made, is sufficient to raise considerable anxiety about the ability of the Department of Health to identify clearly how to treat patients according to need and need alone.

As with previous governments, the Government will wish to fulfil their aspirations for the best service for the health of the nation. Whether previous governments got that right is a matter for individual criticism or praise. However, I am sure that it is the Government's aim to achieve that. To seek improvements on past action is understandable. What is not acceptable is to decry previous systems, which may be improved. To change the system unnecessarily can produce hindrance, delay and extra unnecessary costs. Genuine assistance and the speeding up of the process of care for the patients must remain the paramount, central objective.

The formation of a national service framework, a national institute for clinical excellence and a commission for health improvement, together with new statutory responsibilities, will give opportunities for intervention in the work of the GP, without guaranteeing improvement in either the efficacy or success of the service to the patient. I believe that that is the failure of the Bill at present. During the passage of the Bill through this House, I hope that some amendments will be made to improve it. The current flexibility in the National Health Service should not be replaced with rigidity.

5.17 p.m.

My Lords, I thank the Minister for her clear introduction of the Bill and for her patience and endurance for the second time within a week.

I speak as one who has worked as a nurse, a midwife and a health visitor, and with an interest in ensuring that the National Health Service delivers a high quality service. I also served on the Royal Commission on the National Health Service from 1976 to 1979 set up by the noble Baroness, Lady Castle. We, suggested restructuring the health service. Those suggestions were overtaken by a change of government in 1979. I have also served on a health authority, a district health authority, and as the first appointed chairman of the English national board, and as a member of the UKCC. I therefore speak with a great wealth of experience about how the National Health Service works. I am sure that all noble Lords taking part in the debate share a great deal of experience of the NHS.

I welcome the main objectives of the Bill for modernisation and partnership, and the working arrangements for them. I welcome the objectives of Clause 1 for the abolition of GP fundholding and the provision for the establishment and funding of primary care trusts. I believe that this will contribute to the NHS ethos of equality of access to services and do away with some of the bureaucracy and the culture of competition which has grown up in the health service.

In a service which is to be primary healthcare led—I take the point of the noble Lord, Lord Winston, about the importance of secondary care—the contribution of nurses, midwives and health visitors is pivotal. Nurses have already developed clinically effective and cost-efficient services in primary care. They are running outreach health clinics for the homeless, diagnosing and treating a range of conditions; and practice nurses run minor injuries clinics in local health centres. Patients with chronic diseases such as asthma, diabetes, Parkinson's disease or irritable bowel disease all benefit from nurse-led care. Because of that and because of the importance of primary care nurses in the service, it is essential that nurses are able to commission and develop such services according to the needs of the local population. I believe therefore that we need to look at the governance of the trusts. That is not altogether clear in the Bill as tabled.

The report of the Commons Health Committee published earlier this month stated:
"We recommend that Primary Care Trusts are not established unless their Board Membership has been reviewed to ensure it reflects the broader professional and community input that is required for PCT status … Concerns have been expressed about the potential conflict of interest in having a built in majority of provider GPs on PCT Boards".
Is the Minister able to confirm that that recommendation of the Commons Health Committee will be accepted?

There are also problems in the employment of professional staff by primary care trusts. Only last week an article in the Nursing Standard stated that serving on a primary care group could cost nurses thousands of pounds a year—I did not know that they had thousands of pounds a year to lose, but that is what the article maintains—if their contracted hours are affected by PCG duties. The guidance given suggests that an employer is entitled to all or a proportion of the allowance made to members.

Under Clauses 13 to 18 dealing with quality, I welcome the establishment of the commission for health improvement. Some of the early clinical nursing research in the 1960s had as its objective to establish ways of measuring the quality of nursing care. Since that date nurses have been very much involved in establishing ways of assessing the quality of nursing care. The nursing profession would seek assurance that the work of the commission will cover not only medical standards, but also the essentials of care—hygiene, cleanliness and dignity, continence care and information and support for patients. A recent survey published by Help the Aged entitled, Dignity on the Ward, draws attention to some appalling conditions and poor care received by older people in hospital. Hence I seek an assurance that the commission will cover the basic essentials of care in hygiene, cleanliness and dignity.

The aspect of the Bill that is causing the greatest concern among the professions and about which I have received the most representation is the section on the self-regulation of the professions. I do not want to repeat too much of what has already been so eloquently said by my noble friend Lord Walton, the noble Lord, Lord Winston, and others. The registration and self-regulation of nursing, midwifery and health visiting goes back many years and is jealously guarded by the profession. I accept that, 20 years after the Nurses, Midwives and Health Visitors Act 1979, the time is ripe for a review of the role and function of the statutory bodies. But I am disturbed that Part III of the Bill appears almost as an afterthought under the heading, "Miscellaneous and Supplementary" provisions.

The Minister indicated that her department had been exploring with the professions legislation that should take place for nurses, midwives and health visitors.

I was appalled that this Bill and the provisions on self-regulation appeared without waiting for the publication of the consultations that have been taking place and for the report from the UKCC Commission on Education. That is not partnership. At least we had some verbal information of what the consultations on the Nurses, Midwives and Health Visitors Act were saying and I am delighted, for instance, that it is said that the health visiting profession is to continue as a profession in its own right.

But I am disturbed, as are other people, about the use of Henry VIII clauses to regulate the profession by order. I understood that the report of the Committee of Ministerial Powers, as long ago as 1932, ruled that such powers should be exceptional. I am glad that these are to be subject to affirmative procedure, but I still believe that the professions are exceedingly uneasy about the provisions. We shall certainly want to challenge them by amendment at further stages of the Bill.

5.27 p.m.

My Lords, as the noble Baroness, Lady McFarlane, pointed out in her able representation of the nurses, midwives and health visitors, I too seem to have been on my feet on behalf of the dental profession on several occasions over the past two or three weeks. Like other noble Lords, I receive many briefing papers from representatives of different branches of medicine and healthcare. Among others, they come from physiotherapists, chiropractors, the NHS Confederation, the National Consumer Council, the Royal College of Midwives and from Boots. A brief even arrived from the Association of Community Health Councils since I took my seat this afternoon. All made valid points which I am sure will be examined at the next stage of the Bill.

There are three parts of the Bill which will affect dentists and I intend to confine my remarks to them this afternoon. They are the establishment of primary care trusts to replace primary care groups: measures to improve quality and prevent fraud and a proposal to introduce order-making powers to change the Dentists Act.

The Government have a commitment to provide dental services for the whole population and to improve access where there are difficulties. Where primary care trusts are established to provide health services to the population they serve, dentistry should be represented on the boards of those trusts. This good practice has already been established in Wales with dental representation on local health groups.

Secondly, the provision of dental services, particularly by the hospital and community dental services, must not be adversely affected by these proposals. Safeguards must be given to ensure that the community dental services are not fragmented and the services they provide to special needs patients, who by definition are in the most vulnerable groups within society, must be maintained. The public health role of the community dental services also requires them to establish particular functions across a district and it is important that these arrangements are continued.

The Bill will place a new duty of quality on NHS trusts. It will also set up the commission for health improvement. Such much-needed measures can only be a success if they are introduced in full consultation with the professions, including dentistry.

The Bill also provides for stronger measures against fraud. Rightly, the Government seek to eradicate fraud whether it is perpetrated by patients or practitioners. The proposed actions which can be taken against dentists who are brought in front of the NHS tribunal accused of fraud are severe, if not draconian, and will prove a deterrent to anyone contemplating a dishonest act. If found guilty, the dentist will be unable to work in the NHS and will almost certainly be unable to work at all. In these circumstances, adequate safeguards must be written into the Bill.

I had hoped to see a provision in the Bill to give the Secretary of State powers to ensure that all dentists and doctors must now have compulsory indemnity. It is of paramount importance that patients who are treated by general practitioners should have the same rights, in the event of any claim, as those who are treated within a trust. While declaring an interest as a member of the Council of the Medical Protection Society, I would support the idea that indemnifiers should be approved by a panel set up by the Secretary of State and would strongly recommend that they provide an occurrence-based rather than a claims-made cover.

Finally, I turn to the Government's proposed order-making powers. The Government's proposals will end the frustration of finding time to open the Dentists Act to get change. Last year, the Government proposed, "to simplify the process by which the law regarding professional regulation is kept up to date by amending the Dentist Act by Order". This Bill will introduce a simpler procedure which will help with modernisation of the General Dental Council and other regulatory bodies such as the General Medical Council. They will, of course, continue to retain their roles as regulatory bodies for education, standards and disciplines.

As my noble friends Lord Howe and Lord Walton and other speakers have pointed out, there are, however, threats in the Bill as currently drafted. It gives wide powers to the Secretary of State under Clauses 47, 48 and Schedule 3, paragraph 1, to amend existing legislation and regulations as he thinks fit. Clarification is needed as to the extent to which these powers will be limited. The core functions listed in Schedule 3, paragraph 8 (2), must be exercised solely by the General Dental Council. The schedule, however, allows them to be the responsibility of a "professional body", which is only loosely defined in the Bill. Again, clarification is needed. Although the Government say that they are committed to the principle of professional self-regulation, there are no safeguards to ensure that the existing methods of ensuring this will be preserved.

Dentists consider that the best way to ensure that professional self-regulation continues to be effective in meeting the needs, of both society and the profession is to provide for minor changes to be achieved quickly, by order. However, major changes should remain subject to primary legislation, thereby allowing proper debate and consideration by Parliament.

5.37 p.m.

My Lords, I wish to make clear at once that I bring no professional qualifications to today's debate. However, I bring more than 30 years experience of the National Health Service in Scotland. For some time I was Health Minister in. the Scottish Office in the 1974 to 1979 Labour Government. For some time I was a non-executive director of an acute hospital trust. For some time I was chairman of Fife Health Care Trust, a position which I relinquished a year ago.

I describe that background in order to make three points before dealing with Part II of the Bill, which relates entirely to Scotland. First, I greatly welcome the abolition of fundholding. I know that the noble Baroness, Lady Carnegy, does not share my view. She believes that it would be far better if all general practitioners were fundholders rather than the small number who took up the option in Scotland. Two measures proposed by the previous Conservative government were never taken up in Scotland. One was opting out of the state education system. Only one school in Scotland chose to do so. The other measure was fundholding. In my former parliamentary constituency of Falkirk East there is evidence of general practitioners who entered the fund-holding system, suffered it for a year and then withdrew. I can name a general practitioner in my native home county of Fife who had to go to university to take a business management degree in order to deal with the paperwork of the fundholding system as it grew up.

One of the best medical examples I cart give is of a young boy who was seriously ill, never to get better. His parents claimed their right to have him at home and to have 24-hour care and attention for him. A very expensive care package was put together so that the boy could be discharged into his home environment. Part of the package was a contribution of £50, 000 from the general practitioners who were fundholders. The care package collapsed because the fundholding practice refused to make its £50, 000 contribution. There is ample evidence to support the claim that a number of general practitioners inflated their prescribing Bill during the year before the introduction of fundholding because their allocation was based on that year's spending. That, too, threw up enormous difficulties with the fundholding principle and I am delighted to see the back of it.

I turn to the pharmaceutical industry. I recognise what was said by the noble Lord, Lord Walton, the noble Baroness, Lady Cumberlege, and my noble friend Lord Winston that the pharmaceutical industry is the jewel in the crown. I recognise that it attracts tremendous inward investment. I recognise, too, that it is the heart of research in this country. However, those three claims and more do not give the pharmaceutical industry the right to overcharge the NHS for the drugs it supplies. When my noble friend Lord Healey, who was in his place earlier today, was Chancellor of the Exchequer and I was the Health Minister in Scotland a well-known drug company, which I shall not name to save it embarrassment, had to repay the then Labour government £3 million for overcharging for drugs. I recognise all those plus points about the pharmaceutical industry, but perhaps I may make it clear that they do not give the industry the right to overcharge the NHS for drugs. During our debates we must keep in proportion the importance of industry on the one hand and its freedoms on the other.

The third point that I wish to raise before moving to Part II of the Bill relates to the self-regulatory bodies. It makes no difference whether we are dealing with the professions or the press. There is one common aspect; that they move to put their own house in order only when they are under threat of legislation to do so. We ought not to turn a blind eye to the fact that there has been disquiet about the way in which self-regulatory bodies regulate their professions under circumstances of serious complaint, whether from Bristol or elsewhere. I accept that people have confidence in the medical profession, general practitioners, doctors and the nursing profession, but we will not do the professions any favours if we turn a blind eye to the concerns being expressed about the way in which complaints against those professions are dealt with by the self-regulatory bodies. We shall have the opportunity to deal with this matter in secondary legislation through statutory instruments and the affirmative resolution procedure. One of the weaknesses of such legislation is that it cannot be amended. We can only vote for it or against it; there is no question of amendment. That is something we must all take on board.

I turn to Part II of the Bill which deals entirely with Scotland. In many ways, Scotland is way ahead of England and Wales in the reorganisation of its health service. The primary care trusts, about which so much has been said this afternoon, are already in place in Scotland. The trustees have all been appointed. The reason I was astonished by the noble Lord, Lord Mackay of Ardbrecknish, raising his point this afternoon is that the primary care trusts will come into being in Scotland in few weeks' time, on 1st April. I was formerly chairman of the Fife Healthcare NHS Trust which will now become the primary care trust in Fife. To illustrate the importance that has been placed on primary care, that trust has appointed as a medical director not a consultant psychiatrist or a consultant geriatrician but a general practitioner because it is at that level that we see the sharp end of medicine.

I sometimes wonder whether it is generally understood that for every 100 patients who visit their general practitioner, the general practitioner will treat 100. He or she will give them a prescription. The patients go away with their prescriptions and are usually cured. Only 10 in each 100 are referred to hospital, of whom only four are actually treated in hospital. The other six are returned to their general practitioner with advice to the GP about how they should be treated. They are treated and usually cured. Of the four who go to the secondary sector of the National Health Service, the district general hospital, perhaps one in 100 is referred to the tertiary sector, to the great centres for the treatment of cancer, cardiac problems and so on. That is why the general practitioner is so vital.

In my view, primary care trusts will be an important element in the strategic planning of health services across any region where they are in place. I have one complaint. I shall leave it with my noble friend Lord Macdonald of Tradeston. I am delighted that he has been in his place on the Front Bench throughout the debate to hear what is said about Scotland. I would have taken this matter further in Scotland. I am not saying anything in your Lordships' House that I have not said at health service conferences in Scotland. I would have abolished the health boards in Scotland as well. Listen to this: it costs £6.1 million per year to run Fife Health Board and it does not treat a single patient. The primary care function of the health boards will be transferred to the primary care trusts. After 1st April, the health boards in Scotland will simply act as bankers on the one hand, allocating resources to the acute and primary care sectors, and as strategic planning authorities on the other hand.

The days have long passed when areas such as Fife, Stirlingshire and the County of Angus had illnesses, diseases and conditions that were peculiar to their own area. The coalmining industry has gone, as has the jute industry in Dundee, and the foundries in Stirlingshire. If one looks across and along that massive area, one sees that certain common illnesses are prevalent, whether in Arbroath or on the boundaries of Stirlingshire and Glasgow.

It is perfectly possible strategically to plan the health service across much wider areas than hitherto has been the case. I advise my noble friend on the Front Bench that that is where the massive savings can be made: in the abolition of the health boards and the setting up of strategic planning authorities comprising the acute sector, the primary care sector and part of local government in the form of social work. Those three elements brought together could easily help us strategically to plan the health service across much wider areas.

I am fairly certain that I speak for large numbers of people in Scotland when I say that we welcome Part II of the Bill. It will allow us to get on with the reorganisation that was promised in the Labour Party's manifesto on which we won the election. We reduced the number of NHS trusts from its high level of 47 to a much more manageable figure of 27 or 28. We have amalgamated a number of acute trusts to give a much better co-ordinated, integrated, acute service to the people served by the acute hospitals.

I come now to a matter that is not for your Lordships' House because I suspect that this will be the last piece of Scottish legislation that we shall discuss. In many ways I am unfairly taking advantage by talking, through your Lordships' House, to the incoming Scottish Parliament. All that I want to see now is even more integration, with the abolition of the health boards, and much more responsibility given to the primary care trusts on the one hand and the acute trusts on the other, joined by the social work departments of local authorities.

Finally, there is also a strong case for that part of the social work department that deals with care in the community being taken away from local government and given to the health service. The conflict that has arisen between social service departments and the health service about discharging patients from long-stay hospitals into the community is unbelievable. When a patient is discharged we are told that the money follows the patient. My noble friends can take it from me that when patients have to be re-admitted because of a relapse in their condition, the money never comes back with the patients. Once a local authority gets its hands on the money, it is a prisoner of the local authority. The health service gets the patient back, but the money never comes back with the patient. I leave those thoughts with your Lordships and I am grateful for the tolerance that has been shown.

5.49 p.m.

My Lords, I rise with some diffidence as I do not have the deep and direct experience of the National Health Service evinced by many noble Lords who have spoken. However. I have been in political life a long time. I have seen many reforms and reorganisations heralded in the NHS, local government and other organisations. It is my experience that rarely do all the glorious things expected from the latest reform come to pass. In the fullness of time, further great changes are heralded. I dare say it will be the same with the Bill.

I am sorry—unlike the noble Lord, Lord Ewing of Kirkford—that we are parting with the fundholder principle. I thought it one of the few changes that was working and, had it been allowed to last longer, that would work even better. One of its strengths was its voluntary nature. If doctors did not like fundholding, they did not have to become involved. I gather that that was the case in Scotland. Many doctors who did join found fundholding a rewarding way of managing practices that gave power back to general practitioners. That is important. We are in danger of losing that advantage with the change to primary groups and eventually, trusts.

I understand there will be no voluntary arrangement. Doctors will perforce have to join the new groups or trusts as they are formed. They will be large, and that will make for more bureaucracy. If I were a betting woman, which I am not, I would wager that groups and trusts will produce more bureaucratic procedures than ever existed under the arrangements for fundholding.

I am concerned also about the upheaval for many people who work, n the health service. I have a friend who became an administrator of a large multifund in a deprived area of London. She became increasingly enthusiastic about the improved services that it was possible to offer. She is devastated by the decision to do away with fundholding and all the changes involved in moving to the new system. I imagine many others feel the same. I am reluctant to see that change happen. I wish it well but T have grave doubts that it will work as well as the Minister says.

Clause 19 contains a noble expression about the various NHS bodies co-operating one with another. Although that is a noble sentiment, I do not understand what it means. What precise duty can there be? If there is a duty, presumably there can be derelictions of duty. Who will be responsible for ensuring that they are put right? To put it crudely, that seems like waffle. It sounds good but will not be particularly practical. I seek guidance on that point when the Minister winds up.

The notorious Clause 47 has been mentioned by several noble Lords who referred to the specific worries of various professional groups ancillary to medicine as to how they will be governed. I want to make a general point about the approach to making legislation. Over the years it has become increasingly obvious that governments favour a light framework to which they can add details later. That seems to give too much power to the government, or in this case the Secretary of State for Health.

It is all very well to say that matters will come before the House under the affirmative resolution procedure and can be debated. However, the point was made well by the noble Lord, Lord Ewing, that it is not possible to alter the provisions. Therein lies the rub. That is where Parliament loses control and the executive gains it. To put it vulgarly, either one swallows the order whole or one spits it out. That does not seem a sensible way of proceeding.

It would be far better if the Bill contained the right for parliamentarians to make alterations. In the absence of that right, I do not think that the Government's power should be exercised as widely as it is. The Government should think again about the whole approach. It would not hurt them to produce something far more detailed and, if they cannot, to make regulation the subject of separate legislation. I do not believe that we are here to make life easy for governments.

5.56 p.m.

My Lords, when the White Paper was published by the incoming Labour Government, one welcome aspect was their commitment to abolishing the internal market. I presume that we have before us the substitute. I want to understand the new internal market because, whatever one calls it, there is a different kind of market here.

Before fundholding was introduced, the GP was able to deal with patients and was subject to light budgetary constraints on how much he or she could spend on patient treatment. The noble Earl, Lord Howe, pointed out several advantages of fundholding but many people found that system inequitable. There are various ways of dealing with that inequity. Either one makes every GP a fundholder so that no patient belongs to a non-fundholding practice, or one returns to the previous status quo. That would be imperfect.

There are two kinds of inequity in the health service. One relates to fundholding but the other does not. The inequity highlighted by fundholding was that in any local area, some patients might belong to fundholding practices while others might not. Another big inequity, which was disclosed in the Black Report many years ago and more recently in the Acheson Report, was that there are health inequities across the country, due to environmental or economic factors. Although the NHS does its best to deal with them, it is far from resolving them completely. Clause 21 is welcome because it places on health authorities a duty to improve health in their regions.

If one wants inequities to be overcome in every area, all patients should have equal access to medical services. At present, across areas people have access to unequal resources, so that poorer areas get more and richer areas get less. I do not know how the primary care trusts will deal with that problem. I have read the Explanatory Notes, but I still find it hard to understand. Perhaps later, during the Committee stage, we will be able to understand it.

It seems to me that a primary care trust will be a very large unit. Indeed, it may span a whole borough of, say, 100, 000 people and have a budget of £60 million, with all the GPs belonging to it. I do not quite know how the inequity as between patients within an area will be dealt with by those trusts. Moreover, it is not quite clear as to whether there is any mechanism, as between PCTs, for paying those covering poorer areas more to enable them to look after their patients better, than those that cover more prosperous areas. That remains to be sorted out; indeed, it is very hard to know what we are doing in that respect.

I make the following suggestion with caution. It is just possible that such trusts are too large. Although we want to put every patient in some group or trust, perhaps there ought to be many more of them, thus providing much greater diversity as regards primary care. I have in mind much greater diversity of size and mix of different kinds of medical healthcare. I believe that diversity will lead to experimentation which may, in turn, lead to an improvement in quality. Whereas, if you have a large monolithic primary care trust, it may be difficult for patients to get what they want.

I have but one comment to make about self-regulation. I just wish that the latter had not been made part of the Bill; indeed, I wish that it had been done separately. I can envisage the Committee stage being entirely dominated by discussions on Clause 47, and nothing else. It always happens. If you try to do anything with well-organised professions, they will take up all the time. Doctors and lawyers are like that; but, fortunately, economists are not. There is no licence for being an economist: anyone can be an economist. We have failed somewhere. I am afraid that Clause 47 will dominate our Committee discussions.

I have one final point to make about pharmaceutical price regulation. I very much take on board what my noble friend Lord Ewing of Kirkford said. There are two factors to bear in mind. First, there is no doubting the fact that we have a very good pharmaceutical industry; indeed, it is a world leader. But, secondly, we must bear in mind one of the advantages it has had over a number of years. It has had a single stable buyer—one great purchaser. That has reduced uncertainty to an enormous extent. Pharmaceutical industries in other countries do not have such a large single purchaser. That removes so much uncertainty and frees the industry to carry on the research and development and take risks, because the risks are at the margin of the business and are not the main concern.

I do not want to detract from the possibility that things could go wrong. Of course, the Association of the British Pharmaceutical Industry is not very happy with this, but it was never happy with regulation. However, if you want to encourage research and development, you should do so through a tax concession and not through overpricing. The pricing should be left so as to allow it to be as reasonable and as efficient as possible. If you want to encourage research and development, you should do something else. I believe that it would be a mixing up of two different objectives to allow people to overprice just because they are good at R&D. I say that because not everyone who overprices is necessarily good at R&D. Indeed, they are two different things. I very much welcome those provisions and am less disquieted than other noble Lords about the concerns of the pharmaceutical industry.

As the possible outcome of this legislation, perhaps not now but during the next 10 to 15 years, I should like to see a greater equity in local health provision as between patients coming from different income classes and inter-regionally—that is, people living in different areas. The kind of evidence produced by the Black and Acheson Reports is something about which we should be seriously concerned. Indeed, we ought to be able to do better.

6.4 p.m.

My Lords, as ever, the noble Lord, Lord Desai, has made a fascinating speech and put forward one or two interesting suggestions, which we shall no doubt follow up. However, I go back to the speech made by the noble Lord, Lord Ewing. He knows the National Health Service very well indeed, warts and all; and displayed that in what he said. But, in Scotland's case, it seems to me that the manner in which the Government are proposing the enormous changes contained in the Bill is surprising, to say the least. They are fundamental changes, particularly in primary care.

Part II of the Bill, about which I shall mostly speak, replaces fundholding and the present relationship of GPs to health boards and trusts with new reconstructed trusts, which are as vaguely described in that part of the Bill as they are for England and Wales. Below the primary care trusts there is to be a structure for professional involvement—a combined structure which is considerably different from that proposed for England and Wales. At present, the whole system seems to be understood mainly by those who are preparing for its implementation. As far as I can discover, few, including GPs, are not somewhat mystified and there has scarcely been any public discussion.

In addition to Part II, Clause 47, which relates to professional self-regulation, also applies to Scotland, as do the powers in Clauses 26 to 31 on the price of drugs. On the latter I should point out that the regulation of prices will be of considerable interest to a very large and important pharmaceutical industry in Scotland. It will also be of equal interest to our important university medical schools, and their related hospitals, which depend for much of their income and much of their research skill on chat which comes to them in the way of new drugs and new inventions.

As my noble friend Lord Mackay of Ardbrecknish suggested in his brief intervention during the Minister's introductory speech to the Bill, all this is being done only 13 weeks before the elections to the Scottish Parliament—a parliament which will be opened on 1st July, its new devolved responsibilities to include this very health service. Clause 51 of the Bill tells us, as one would expect, that, from then on, the responsibilities (which in the Bill are said to be those of the Secretary of State for Scotland) will pass to Scots Parliament Ministers. So we at Westminster are being asked to turn the Scottish health system upside-down and to set up arrangements, which, in less than five months, will be the responsibility of others.

I am glad to see that the Scottish Office Minister, the noble Lord, Lord Macdonald, is sitting in his place today. I wonder whether he will be able to help his noble friend Lady Hayman to explain this extraordinary timing. In his intervention at the beginning of the debate, the noble Lord, Lord Ewing, seemed to think that this did not matter. However, knowing their plans for devolution from the outset, why did the Government put all this in their general election manifesto, rather than waiting and putting it into their manifesto for the Scottish Parliament? It seems to me that it would have been very much more democratic and very much simpler. Perhaps the Minister will also be able to tell us what will happen if the Bill has not become law by 1st July. Judging by the reception that her speech and the Bill have received thus far, that seems a possibility. We shall certainly need to explore the practicality of the timing of the implementation of Part II in Committee. Those are my first questions.

The following questions concern the drafting of Part II of the Bill. It is not at all surprising that so few people working in the National Health Service, and even those whose job it is to develop it, understand Part II which is due to be implemented in April. However, it is difficult to know what is supposed to be happening. The clauses of Part II are drafted almost entirely in terms of amendments to a previous Act, the National Health Service (Scotland) Act 1978, which itself was amended by the National Health Service and Community Care Act 1990. I suggest that this renders Part II of the Bill difficult for noble Lords and interested bodies to comprehend who want to design amendments. It has to be said that the Explanatory Notes do not tell us all that much either as regards Part II. Can the Government help us well before Committee stage by producing a text showing how the existing 1978 Act will read if Part II of this Bill becomes law, with the changes perhaps printed in heavy type? That would help the Committee and those who want to brief us.

I have given the Minister notice of my next point. For the benefit of all concerned in Scotland, now and in the future, will the Government consider including such a text as a schedule to the Bill? It is not unknown in Scottish legislation. Erskine May states at page 532 that an example of such a schedule, sometimes known as a Keeling schedule after Mr. Keeling who proposed the idea, was included in the Rating and Valuation (Amendment) (Scotland) Bill 1983. Will the Government consider that kind of clarification?

One of the few clear statements in Part II of the Bill is that GP fundholding practices will cease. As the noble Lord, Lord Ewing, knows, I consider that for Scotland in particular that is a mistake. North of the Border fundholding has been taken up unevenly—the noble Lord is quite right about that—but where it has been adopted it has been used most responsibly and with considerable benefits to patients. In my part of the world, Angus, which the noble Lord mentioned, a group of fundholding GPs were dissatisfied with the slow turn around of blood samples, which are so important to GPs. They were unable to get an improvement within the public system and they approached the private sector. Quickly a twice-a-day collection was established with next day turn around for all patients, not just the patients of fundholding practices. That was a huge improvement. In the Grampian region where fundholding covers 50 per cent. of patients, all patients, not just the patients of fundholding practices, can now have physiotherapy on Saturdays, which was not the case previously.

Most of what we know of the system which is to replace fundholding is to be found in the White Paper Designed to Care and not in this Bill. Even the White Paper is fairly vague, as are the Explanatory Notes in this case. For primary care cash limited funding will pass from health boards to primary care trusts. Those trusts will set up below them voluntary groupings called, in wonderfully Old Labour language—for which I believe the noble Lord, Lord Ewing, may have some affection—local healthcare co-operatives. But what is in a name? GPs, pharmacists, dentists and other professionals will come together in these co-operatives to involve themselves in the development and management of services. They will be allowed a budget if they wish, although, needless to say, the Secretary of State or the relevant Scots Parliament Minister will control its extent.

In my part of the world primary care trusts will include a vast area—the whole of Angus. Perthshire and Kinross. I understand that it is planned in Angus alone to have two co-operatives, one in Dundee and one in Perth, each with its own board and committees of health professionals. These co-operatives will be health professionals' main point of contact with the system. I wonder how much of their time will be taken away from patient care in doing this, and at what cost to the health service.

The Prime Minister in his introduction to the White Paper stated,
"We are saving £100 million of red tape and putting the money into … patient care".
I wonder whether that will be the case. How long would it take to effect the change in our local blood test turn around under the new system? I am told that under the new arrangements it would take well over a year to get any change at all, if one got it. Nothing might happen.

That leads me to a point made by the British Medical Association which is anxious about the vagueness of the Bill and indeed the White Paper on another aspect of primary care trusts. It wants to know whether there is any role for primary care trusts in Scotland—as there is in England and Wales—to commission secondary services. The BMA suspects there is not. Perhaps the Minister would confirm that when she replies to the debate because it is an important point and we should like to know the answer straight away if possible.

The Minister referred to all this as modernisation, as one would expect. However, it seems to me strangely old fashioned, quite frankly, to move from devolution down to GPs, down to the coal-face, back to centralisation, with people at the coal-face able to communicate only through bureaucratic bodies. I wonder whether that will work and whether it will be cost-effective. In Committee we must clarify precisely what the Bill states in relation to Scotland and the rest of the UK. We must identify the powers which will be in the hands of the Secretary of State and the Scots Parliament Minister. We must look closely at what can be done through statutory instrument. It will be interesting to see what the committee which examines these things on behalf of your Lordships has to say about that. Then we must do all we can to ensure that this Bill is workable.

I am sorry about the Bill. I do not think it is nearly as good as it should be. I am not sure what my noble friend will do about his reasoned amendment but I hope noble Lords will listen carefully to what he says when he speaks at the end of the debate, and that perhaps they will support the amendment.

6.18 p.m.

My Lords, I begin by declaring a current interest as a non-executive director of the London Ambulance Service NHS Trust and a former interest as the director of the Association of Community Health Councils for England and Wales until I joined your Lordships' House.

I welcome this Bill and in particular its objective of improving the quality of healthcare in the NHS through a duty of quality on NHS trusts and primary care trusts. I also welcome its objective of improving the accountability of providers and commissioners of health services. I welcome the new duty of partnership on NHS bodies and between the health service and local government. Although I acknowledge that these will be controversial for many noble Lords, I welcome the provisions to modernise the regulation of the health professions.

I was concerned by the remarks of my noble friend Lord Desai on economists. I take the view that the public have the right to expect that economists should be regulated and that there should be a proper complaints and redress system for the public when the economists get their diagnoses wrong. But perhaps that will be a long time in coming.

It is worth remembering that our NHS is still the envy of the world. As a nation, we have a healthcare system that is more universal, more efficient and more effective than those available in most other parts of the world. What is more, we spend less of our GDP per head on the healthcare system than most other developed nations. However, there remain enormous health inequalities, and the gap between rich and poor has widened in the last 20 years. Too many people die prematurely in this country because of the effects of poverty and poor living conditions. I know that the Public Health Alliance has estimated that one jumbo jet per day crashing, with all its passengers being killed, is the equivalent of the number of excess deaths among those who are on lower incomes.

The market orientation of the past few years has done little, if anything, to improve the efficiency of the service or, more importantly, to widen the choice available to individual patients. Indeed, the elements of competition have worked against the co-operation of different parts of the service. That is why the Government's approach of replacing competition with co-operation and introducing a new duty of partnership is so important: mutualism rather than the free market.

At the same time, health authorities will be required to set a framework—the health improvement plan—for commissioning decisions which will enable improvements in health status to be achieved. So what we have there is a shift in focus to outputs rather than inputs. The emphasis will now be on what should be achieved rather than on the precise agency that does it—dare I say it, very much The Third Way.

There will be collaboration between the NHS and local councils to achieve improvements in health, recognising that such improvements are more likely to flow from tackling the causes of ill health rather than the symptoms of illness, and recognising that such action is going to be collective as well as individual. Yesterday in your Lordships' House we had an interesting series of exchanges at Question Time about the interpretation services in the health service. In my view, it would be the case that Clause 13 of the Bill, which sets out the duty of quality to be laid on each primary care trust and NHS trust, implies an acceptance that each patient should be entitled to equal treatment, irrespective of their linguistic and cultural background. To assist in this, accurate and accessible interpreting and translating services need to be available throughout the health service.

One example may be useful to illustrate the point. How many of your Lordships have had occasion to seek treatment from a doctor or to collect medication from a pharmacy while abroad? Under such circumstances one may be anxious, bewildered, certainly not feeling well and therefore perhaps less able to cope in whatever command we might have of another language. I suspect that in those circumstances the ready availability of interpretation services would be most welcome.

In my local authority area nearly 40 per cent. of the children in the local schools speak a language other than English at home. In such areas—though it is also true across London and in many other parts of the country—good interpretation services are vital within every hospital, clinic and GP's surgery. A modern, dependable service cannot rely on schoolchildren interpreting for their parents or their grandparents.

The importance of a user-centred service—one that is responsive to the needs of those who depend on it and which is built on a true partnership between the patients and the professionals—must underpin the provisions of this Bill. I look forward to a number of issues being clarified during its passage through this House. May I therefore pose a number of questions to which I hope it may be possible to return in due course?

First, how is "quality" in Clause 13 to be defined? Is it to be a definition that is medically driven or will the views of patients, carers and other health service users be taken into account in defining standards against which quality is measured in monitoring service provision and in evaluating outcomes? Secondly, why is the duty of quality not imposed on health authorities, which will have a key role in setting the framework within which NHS trusts and primary care trusts will operate? Likewise, in the interim period, should not a duty of quality be placed on primary care groups?

Thirdly, how is the commission for health improvement to operate? May we assume, for example, that its reports will be in the public domain, subject of course to the protection of any individual patient's confidentiality? Will those reports be routinely sent to community health councils with an interest in the services covered by any specific report? Will CHCs be able to trigger an investigation by the commission where they feel that one is merited?

Fourthly, in responding to the reasoned amendment proposed by the noble Earl, Lord Howe, will my noble friend the Minister be able to reassure the House that primary care trusts will have a membership which includes a majority of lay people? Will primary care trusts have a duty to consult widely on their plans and proposals and will CHCs have the same rights as they currently do in respect of health authorities? Furthermore, will CHCs have the right to inspect services directly run by primary care trusts?

Finally, I should like to touch on another issue to do with primary care trusts. We understand that they will be permitted to provide services to private patients and to run private facilities. Can we be reassured that there will be practical safeguards to protect the interests of NHS patients and to make sure that primary care trusts providing private services operate in the generality of their activities for the benefit of the health service as a whole? I am sure that we would all want to make sure that there are no conflicts of interest.

While these questions are important, they do not detract from the overall thrust of the Bill. The proposals in it are good, will be good for patients and will help to achieve the Government's objectives, which I am sure we will all share, of making services more accessible, more equitable and more responsive to the modern needs of service users—creating a new NHS that is truly modern and dependable.

6.26 p.m.

My Lords, I wonder how community hospitals will fare under a primary care group or a primary care trust. We understand from the White Paper that the PCGs and PCTs will be representative of all the clinical professions in their area. Will that include representatives from community hospitals and will it include physiotherapists and other professionals allied to medicine, as the noble Lord, Lord Clement-Jones, mentioned? Will it include alternative medicine practices? We look forward to finding out, and of course we must ask what the results will be for our community hospitals.

Take, for example, the case of the Burford Community Hospital that has fared so badly under the Oxfordshire Health Authority during the life of this Government. Burford Hospital has a deserved reputation for having pioneered nursing practices later adopted nationally and occasionally internationally. For instance, Burford had the country's first nursing development unit. Burford developed "primary nursing", which led to the "named nurse" concept. Burford pioneered patient self-medication and Burford was the first clinical area to introduce "nursing beds", where nurses—not doctors—are responsible for admissions and discharges.

Now this centre of excellence is faced with closure as part of a programme to reduce rural Oxfordshire's health capacity by 52 beds and move the caseload to the John Radcliffe in Oxford. It is claimed that this will save Oxfordshire Community Health Council £1.5 million over four years—and well it may—but the costs of treating patients do not disappear. They are merely transferred elsewhere. For instance, the minor injuries unit at Burford will go but another will be opened at Witney at an anticipated cost of £200, 000, to be financed by the health authority with £200, 000 of new money. I am no accountant, but is not another word for "new" the much criticised "creative"?

Moreover, the community health council is going to purchase respite and palliative care from the private sector to alleviate the strain of closing 52 rural beds. Fifty-two beds gone from the rural environment and, with them, the nurses, doctors, administrators and ancillary staff! What will be in their place? A round trip of 50 miles from Burford to Oxford, 36 miles from Witney and 48 miles from Chipping Norton. The costs of these extra journeys will be borne, in part, by the patients and their families and friends.

We should also consider the position of the John Radcliffe, one of our leading hospitals with an enviable reputation for treating critical and acute problems. It will be faced with a full-time demand for at least 35 beds—. based on 39 beds at an average occupancy of 90 percent.—removed from Burford alone. Those relatively low cost beds in the rural community have been used to both obviate admissions to Oxford and to facilitate discharges.

I quote from the John Radcliffe response to the consultation:
"A delay in patient discharge inevitably leads to a delay in patient admission. Therefore, in our present situation, each day we have 16 of our 26 patient assessment areas in the Accident and Emergency department effectively blocked because of unavailability of community hospital beds. A further loss of 52 beds would have a catastrophic effect upon this already intolerable situation".
That opinion was apparently endorsed in the White Paper on the NHS. Again I quote:
"Too often in the past community hospitals have been sidelined. Their contribution to managing pressures of rising admissions has often been ignored. Patients will be able to use local community hospitals to the full rather than have to travel to more distant acute hospitals. This will be particularly significant in rural areas".
In the light of this, will the Minister tell us how the Health Bill will enable the Government to use local community hospitals, not close them?

Time does not allow me to relate in detail the very cogent arguments of the community health council against this proposal, but they cover the overwhelming public and professional opposition. The arguments include the unacceptable pressure that will be placed on other parts of the health and social care system; the failure of the proposal to meet local needs; and the waste of development potential in the community hospitals.

However, I cannot ignore the position of the Government who sat in opposition complaining that the NHS was in jeopardy. The Government said in their election manifesto, "We have no plans to close hospitals." We should look more closely at the words, "We have no plans" because there is nothing in the manifesto to stop a government with an overwhelming majority putting pressure on a health authority to do their dirty work for them; nothing to stop the most populist government of all time concentrating on fulfilling a specific pledge—to bring down waiting lists—at the expense of common sense and common decency to all those who voted them into power; and, most despicably, nothing to stop them plundering the results of the money-raising carried out over many years, enthusiastically and successfully, to provide support, buildings and equipment for community hospitals countrywide. Will the Minister say how she proposes to repay the Burford Hospital's comfort fund the £138, 000 it spent on a new day unit, opened just a year ago.

Finally, how is it that, after a year of agonised debate, the Secretary of State for Health, Frank Dobson, was unable last week to give a straight yes or no to the delegation which asked him to overturn the Oxfordshire Health Authority decision? One wonders whether this Health Bill, with its draconian powers and, as my noble friend Lord Howe mentioned, its four-tier system, will enable Ministers to bring a halt to the uncertainty that the community hospitals are suffering?

6.34 p.m.

My Lords, I, too, am interested in Part H of the Bill, which is of course designed for Scotland. The Scottish clauses are modest—in volume at least—in comparison to those for England and Wales. This is very appropriate in view of the impending devolution of the NHS in Scotland to the Scottish Parliament and Executive. Indeed, there is a small case to make in principle: that there should have been no changes made to the NHS in Scotland on the ground that it ties the hands of the new Scottish Executive to make changes in the foreseeable future. However, I shall not pursue that argument because the removal of fundholding and the internal market is so clearly demanded in Scotland, and the new emphasis on putting the patient back in the centre of the future Scottish health service is so clearly correct.

The plans for greater integration of the various elements of the health service ought to be the basis of delivering a more coherent and co-operative service. This can be mirrored by the one-door approach taken by the personal social services in Scotland, as enshrined in the Social Work (Scotland) Act 1968.

The Bill brings in organisational changes for Scotland's 15 health boards, which will be implemented on 1st April this year. In view of the late introduction of this Bill, there are already in place shadow primary care trusts and embryonic local healthcare co-operatives. As someone who is domiciled in Clackmannanshire, I am aware that the Forth Valley Health Board will combine the two acute hospital trusts into one and has set up the shadow Forth Valley primary care trust. This new trust will absorb the work of the Central Scotland Healthcare Trust, which currently delivers community and priority services, and will integrate those services with the work of the two shadow local healthcare co-operatives.

At present, these shadow local healthcare co-operatives are targeted on Falkirk and on Stirling and Clackmannanshire. In view of the approach taken by the Clackmannanshire council in encouraging alliance working, I suspect that a separate local healthcare co-operative for Clackmannanshire will be more responsive than one trying to react to the rightly differing approach of the two local authorities.

These organisational changes will. I hope, bring efficient management and development to the existing health services. But the real test will be this: can the health service begin to reach into the largely uncharted waters of health promotion and the prevention of ill health? Scotland's population generates some pretty awful statistics about the state of its health; it is not good and it must get better. This is probably the first marker for measuring success for the reinstated Scottish Parliament.

Since the cause of much of our preventable ill-health lies across the width of the administrative spectrum, all talk about co-operative and integrated working will need to be real. If the contributory causes of much of Scottish ill-health lie in poverty, poor quality housing, bad diet, lack of exercise, unfocused education, low self-esteem and addiction to or the abuse of tobacco, alcohol and drugs—prescribed or otherwise—then a formidable amount of activity will be required by the authorities in all their forms. There will also need to be a commitment by individual citizens and their families to work towards this goal of a healthier nation.

The Bill aims to set out the basis for a more straightforward health service. The success of the Bill will be judged by the wisdom of those who work in the industry, the willingness of the general public to heed advice and to demand it, and the commitment of the governing class to tackle these real issues. That means abandoning fears about raising sufficient resources. Very few people now believe that you get better value if you pay less. I look forward to the Committee stage of this Bill which could lead to so much.

6.40 p.m.

My Lords, I speak from a background of over 20 years in the DHSS, six years as a director of social services for Kent County Council and three years as chairman of an FHSA in east London. It is clear from my contribution n the debate last week that I strongly support the abolition of GP fundholding which I must say. from my experience, had nothing to contribute in deprived areas. I welcome its replacement with primary care trusts.

Today I wish to address some remarks to Clauses 19 to 25 concerning partnerships between health bodies and the NHS and local government. Those are long overdue changes and, in my view, the Government are to be warmly congratulated on pushing on with those reforms.

Before I do that, perhaps I may strike a dissenting note as regards the idea of a framework Bill. In my view, there is much to he said for leaving to secondary legislation the detail in relation to items which have a strong operational significance. I have seen from my own experience the problems of governments of all persuasions in trying to respond to pressures, often from professionals and managers in the services, caused by changes which are operationally necessary but which the primary legislation prevents.

I suggest that the approach in this Bill will enable us to produce a better and more responsive health service over the years. It is certainly my experience that governments do not ignore in legislation the concerns of powerful professions. The only thing which is scarcer than money is probably parliamentary time. When professions wish to be able to adapt their regulations, it is easier for them: do so if there is provision for that in secondary legislation. The reality is that all governments consult the professions before they draft the secondary legislation. I suggest that we should become a little more relaxed about Clause 47.

I turn now to the issues of partnership. I spent six years as a director of social services in the 1980s and early 1990s trying to make community care work within the current legislative framework. There were many good aspects of the previous government's community care changes. Indeed, some former Ministers deserve enormous credit for risking their political careers in persuading the then Prime Minister that civilisation would not end if local government were given the lead responsibility for community care. That was absolutely the right decision and it enabled care management to be introduced and individualised care packages to be developed. As a result, many more people were able to be cared for at home and in the community rather than in hospitals. Unfortunately, the legislative barriers between health and social care often made it difficult to pass money over what my right honourable friend Frank Dobson has called the "Berlin Wall" in the interests of those needing care.

Health and social care partnership working is a lot like personal relationships. It requires trust and sharing information, resources and responsibilities. There have been some heroic figures who have overcome organisational barriers to make partnerships work. But it often requires huge persistence and people are often looking over their shoulders to see whether the auditors, governing bodies or others are going to challenge their behaviour. I can still remember the endless arguments with the six different health authorities with which I dealt about whether it was right for community nursing services to be provided to elderly people in local authority homes as an alternative to the far greater cost of transferring them into hospital. This Bill gives a clear signal that partnership working should be the norm, not an exceptional activity requiring superhuman endeavour.

The whole area of services for people with learning disabilities is a good example of where services have been bedevilled by squabbles between health. housing, education and social services. Those squabbles are usually about who should pay. The people with children with learning disabilities are not interested in the arcane organisational disputes with which they are often confronted. They need some integrated life-time planning for their children's needs and secure arrangements for their own respite care. Too often they are frustrated because the different agencies cannot agree funding for the services they all know are needed. Those parents have enough problems to cope with without having to grapple with different bureaucracies patrolling their territorial boundaries.

Clause 20 makes it absolutely clear that,
"In exercising their respective functions NHS bodies … and local authorities … shall co-operate with one another in order to secure and advance the health and welfare of the people of England and Wales".
I have assumed that primary care groups will also be required to co-operate because they are associated with the health authority. It is sad that we need to introduce such legislative provision but the reality is that we do. Unlike the noble Baroness, Lady Fookes, I do not regard that as waffle. I regard it as a clear statement of statutory intent.

Of course those changes would be empty words if they were not reinforced by the new powers to transfer funds in both directions between health and social care. People will be discouraged from engaging in empty joint planning exercises where worthy objectives are agreed but the money does not flow in support of their achievements. The provisions in Clauses 22, 23 and 24 remove the excuses for not having proper joint working between health and social care. People will no longer be able to say, "Well, we should like to be able to work with our health or social services colleagues on this project but the law", or, "the auditors"—the two favourite excuses—"will not allow us to do so".

I welcome the fact that better partnership working is in place in the context of jointly agreed health improvement programmes rather than simple healthcare services. I believe that that will pose some interesting challenges for NHS managers who may encounter professional tribalism in some quarters. For example, although much is made of the shortage of nurses, we could still make much better use of the nurses we have with more use of trained sub-professional staff in areas like long-term care, health education and community supervision. Just as doctors have passed functions to nurses over the past decade or so, some nurses will have to learn to pass more tasks and responsibilities to suitably trained non-nursing staff.

It has taken the NHS 50 years to reach this point in partnership working and to begin to understand the importance of more permeable boundary organisations across which funding can flow. It has taken a government of the same political persuasion as that which introduced the NHS to bring about that change. The Minister and her ministerial colleagues will, however, need to keep up the pressure on people to use those new powers.

Lifestyle changes, a better living environment and improved social care and support will often produce greater health gain than healthcare services. That is a difficult lesson for many NHS managers and professionals to act upon, given that many of them have spent most of their working lives in the hot-house atmosphere of the acute hospital. We should not underestimate the extent of institutionalised thinking which may need to be changed both within the NHS and local government. There will be local councillors who do not wish to see local authority funding mingling indistinguishably with NHS money. There will be managers on both sides of the health and social care divide who want to protect projects and ways of working over which they have more direct control. There will be health professionals who are threatened by health improvement programmes that are not healthcare driven.

My noble friend Lord Winston chided me earlier for suggesting that primary care should be developed at the expense of secondary care. That is not so. I know very well that we need both. The failure to have good quality primary care and community care in the more socially deprived areas simply increases the demands and pressures on the secondary care sector. The Bill will go a long way to help redress that balance and will reduce demands on the secondary care sector.

The Bill is the beginning, not the end, of stronger partnership working for better health. I believe, to coin a phrase, that it will enable the NHS to be tough on the causes of ill-health as well as on ill-health itself. I welcome its introduction and hope that it will have a speedy passage.

6.50 p.m.

My Lords, the Bill contains much work instituted by the previous government as well as much instituted by this one. The Government will of course take credit for both, and will continue to blame any shortcomings in the field of health on the previous government. But of such is politics.

There are points of a background nature I wish to make which I hope will have some relevance before I address some detailed points arising from the Bill. The first, I suggest, is the rise in consumerism among all sections of the population. People are subjected to television advertisements, the publication of league tables, the identification of "best buy" and an increasing coverage in the media of individual brands of all kinds of goods. Such discrimination and comparison affect the public's attitude to the shape of the health service it is looking for and to which it feels entitled.

The next point is that healthcare in this country must be structured to keep pace with the ever-increasing (if I may tamper with the dictionary) individualisation of medicine. In the past, every man's medical history and condition is, and always has been, as unique as his fingerprints. But as a result of the ever-increasing onward march of medical genomics it will, in the near future, be possible to identify a person's medical profile to a degree that has never previously been possible. So the statistics that those produce are both a tool and a challenge to the providers of healthcare. I say a tool in that it enables areas of individual need and treatment opportunity to be analysed in great detail. The challenge is to the providers to meet as many as possible of those areas of medical need within the realities of a not unlimited budget.

That very sophistication leads to another requirement concerning what, to the ordinary man, is a bewildering array of treatment, procedures and pharmaceuticals. It is essential for the medical profession to take the public with it in educating people as to what is available, whether they need it and what it does—an approach whereby the GP, in his traditional one-to-one consultation with the patient, will become an educator and an advocate in guiding the patient through the maze of modern medical practice. I feel that the restrictions on the GP's discretion, referred to by my noble friend Lord Howe, will not assist this new and increasing obligation to educate the patient.

Another general point is that the health service must cope with the unexpected. The most striking example is the AIDS epidemic of the past 15 years. And let us look for a moment at Russia. Who would have foreseen that, following the collapse of the Soviet Union, life expectancy would fall by some five years and that alcoholism, diphtheria, and polio—which I thought was a dead disease—would show appalling increases? There is of course no parallel with the National Health Service, but that is an illustration of how events can colour in an unexpected way a country's management of its healthcare. Reference was made earlier to the NHS juggernaut. That juggernaut needs to be fitted with some delicate and effective power steering.

To take the point further, the national management of healthcare must be seen in the context of a unique asset which enjoys different custodians from time to time but must always be responsive to the needs of the times in the way I have described.

I now turn to some detailed points in the Bill, and, first, the abolition of GP fund-holding practices. It is, I think, true to say that it was the intention of the previous government to make fundholding as widely available as possible. It was available to any practice which sought it, and the only ones which remained outside the scheme were broadly those which held out as a matter of political principle and small practices where there was not the organisational capability.

The present proposals appear, by a remarkable sleight of hand, to have achieved the previous government's intention of making funds available to the poorer practices by ensuring that all GPs are part of a primary care group. While improvement in resources will be less marked in the established fundholding practices, there should be a considerable improvement in the one-man practices in inner-city areas. That is very much to be welcomed, although we would have liked to see the continuing expansion of GP fundholding. The purchasing power of these groups will be considerable; however, I am concerned that there is a danger of their being of an unmanageable size.

The proposals in Clause 24 to facilitate co-operation between NHS bodies and local authorities is to be welcomed. However, it is not clear from Clause 5 whether or not there is a "best value" element, which is already present with local authority tendering. If that is not factored into these arrangements, there is the danger of cosy arrangements springing up between local authorities and NHS trusts. I welcome the Minister's reference to that in her opening remarks. I hear disturbing reports in one or two areas where the NHS trust and the social services department have made an agreement which will have the effect of shutting out newly created primary care groups, thus maintaining the status quo of control between themselves. While I have reservations about the creation of primary care groups, I should not like to see their introduction prejudiced by a blatant abuse. I should like to take up the matter with the Minister.

I now turn to the purchaser/provider split and the abolition of the internal market. The internal market had the effect in many hospitals of bringing a sense of involvement and an awareness of cost and profitability to all who work there—from porters to consultants. I remain sceptical as to whether the ideals of working "for the service" will be realistic under the new arrangements. On that point, I regard the jury as being out. However, I welcome the retention of the purchaser/provider split, which carries with it in relation to both parties a basic discipline of efficiency.

I have a concern. It appears that when primary care trusts reach level 4—that is, the top level of purchasing and managerial freedom—they rise, as it were, above the purchaser/provider regime and embrace the functions of both with all the dangers of slack cost control which the purchaser/provider system was designed to counteract. I should welcome the Minister's reassurance on that point.

In conclusion, I echo the considerable concern expressed on this side of the House about the Bill's dependence on secondary legislation and on centralisation. Nevertheless, I believe that the Government's intentions in introducing the Bill are sincere, if flawed. I hope that we shall be able to effect some improvements in Committee.

6.59 p.m.

My Lords, I should like to thank the Minister for her introduction to the Bill, and also for her announcement of the publication of the JM Report, an independent review of the Nurses, Midwives and Health Visitors Act, which has been awaited by those professions for some time.

Like my noble friend Lady McFarlane, I declare an interest, having been a nurse and midwife and chairman of the UKCC; and I am currently a lay member of the General Medical Council.

The need to move forward and modernise the regulatory bodies has, I know, been recognised. Understandably, any change in the form of reorganisation causes a level of anxiety. However, I am sure that when the proposals set out in the JM Report, accepted by the Government, are seen and understood, that will reassure nurses, midwives and health visitors. Especially welcome is the Government's rejection of the proposal not to register health visitors. The public health agenda is huge, with health visiting playing an important and increasing part, and it would have been catastrophic to remove registration. Health visitors will play an increasingly important part in the primary care groups and primary care trusts. Indeed, the inclusion of nurses in the primary care groups and primary care trusts is a welcome step forward and certainly something that will provide a career progression—and an exciting one—for nurses in the community.

There have been many references already to the part of the Bill relating to self-regulation. Turning to Clause 47 and Schedule 3, at the heart of professional regulation is the need to protect the vulnerable public, and within clinical governance there is a requirement for professional self-regulation. It is to be expected that those in the healthcare professions are anxious to ensure that professional and educational standards and regulation through professional conduct procedures are of the highest possible standard. The professions, I am sure, would not wish to stand in the way of changes to facilitate those functions. The assurance in the Bill in Schedule 3 paragraph 7, to which Clause 47 (1) applies, is welcome. The paragraph states:
"An Order may not abolish the regulatory body of any profession to which section 47 (I) (a) applies".
However, with the introduction of the Order in Council power, I know that there are anxieties about paragraph 8 in Schedule 3. As currently drafted, it states:
"this paragraph does not prevent an Order altering any such function".
As the functions listed in the previous paragraph are the core responsibilities of the regulatory bodies and are interdependent, an order could fundamentally change the regulatory body's raison d'être. These functions of keeping a register of practitioners require standards to be met. They have to be set through educational programmes and the performance monitored against those standards in order for members of the professions to remain on the register. If there is a failure to do that, the mechanism for protecting the public is to have procedures which can ultimately remove the person from the register as unfit to practise, thus protecting the vulnerable public.

Within the fast changing healthcare programmes and developments, there is a need to facilitate changes which might be required within the functions listed in Schedule 3, paragraph 8 (2). Those changes could well be effected by an order, subject to consultation and the affirmative procedures as set out in paragraph 9 of Schedule 3. They would prevent the problem of the backlog of individual Bills, which because of the heavy parliamentary programme, have been delayed for as long as three years. This I am sure would be welcomed by the professions, provided that paragraph 7 of Schedule 3 remains intact. It states that:
"An Order may not abolish the regulatory body of any profession".
Please could the Minister clarify and assure the professions that paragraph 8 (3) of Schedule 3 would not lead to fundamental changes in the regulatory frameworks which have been established through primary legislation by Parliament.

The point was made by the noble Lord, Lord Desai, that much time would be spent during the Committee stage discussing regulation to the exclusion of other aspects of the Bill. I think that that is likely because of the important fact that the professions wish to ensure the principle of self-regulation because their concerns lie in ensuring that the vulnerable public are protected by the means of self-regulation.

I have travelled to many countries and looked at the regulatory process relating to nurses. I have come away every time with the clear message that the systems within the United Kingdom are much envied—indeed, so much so that we in the United Kingdom were asked to set up an international conference on a regular basis to assist those countries which are experiencing great difficulties in setting up a regulatory system.

The National Health Service has been described as the envy of the world. I suggest that the professional regulation that we have in this country is also the envy of the world. I am sure that there will be many contributions during the Committee stage and I look forward to contributing to the debate.

7.4 p.m.

My Lords, I thank the Minister for presenting this long and complicated Bill so well and clearly. I also thank her for sitting through the debate, listening to all the points we make. I very much look forward to the winding up by my noble friend Lord McColl of Dulwich. Your Lordships will be aware that, with my noble friend and neighbour Lady Carnegy and the noble Lord, Lord Ewing—who is not in his place—we represent a substantial Scottish element today. Outside the Chamber, whenever I consult my noble friend Lord McColl, he rightly reminds me of Private Frazer in the comedy "Dad's Army". He looks at me and says: "You are doomed" and I get rather worried. But then my noble friend says to me: "You are doomed—to listen to my speech tomorrow, next week and in the months to come", and I put a smile on my face.

Quite apart from wading into me in the nicest possible way, my noble friend Lord McColl is a professional. He combines many of the attributes mentioned by the noble Lord, Lord Walton of Detchant. My noble friend is an academic: he teaches, he is a professor of surgery and he still practises to this day. Above all, he is one person who knows how the National Health Service has worked and works now. He also knows of the small problems that need to be addressed. That is why, for my part, I am delighted that he is with us today and will be present throughout the passage of the Bill.

I have a few concerns over primary care groups and primary care trusts. They relate to whether the institution of the groups will enable primary care to be given the flexibility that it needs in regard to all the varying diseases, ailments and sicknesses which occur more and more throughout the population. That needs to be addressed at source. I am quite concerned about the flexibility, given the geography and population. I was thinking of England and Wales; I had queries about Scotland but they were answered in the notable speech of my noble friend and neighbour Lady Carnegy. She gave a couple of examples from our neck of the woods in regard to blood testing and physiotherapy. Those subjects are akin to the ailments that affect many people on a day-to-day basis. My noble friend Lady Carnegy pointed out how they could be and had been addressed through the trusts in Scotland. So it is good to see flexibility there.

In regard to the NICE, I am concerned as to whether it will duplicate or replace any existing consultative machinery or advice. No doubt, if not tonight then at a later stage, the Minister will be able to give us advice. I was also interested in what the noble Lord, Lord Walton, referred to as CHIMP, consultational health improvement.

What concerns me most in the Bill is the Pharmaceutical Price Regulation Scheme. I understand that it has been in evidence for about 42 years. The Minister may be trifle startled that 20 years ago I was on the Opposition Front Bench in 1977, having to cope with the Patents Bill. It chanced that I was asked to study the problems of the pharmaceutical industry in regard to patents. I am sure it will be of interest to the noble Baroness that a major vote was carried against the Government on an amendment proposed by a supporter of the Labour Government and a Cross-Bencher. At the dinner held by the Association of the British Pharmaceutical Industry in March 1977—and I should declare an interest: it was an excellent dinner, but that was the only tangible benefit that I have ever received from the industry, although I receive paper and possibly mental intangible advice—the late lamented Minister, Lord Ennals, said that when the Bill returned to another place the Government had no intention of reversing the—I will not call it crushing—important defeat in your Lordships' House. I did not note the words of Lord Ennals at the dinner but 20 years ago during the stewardship of the noble Lord, Lord Ewing of Kirkford, he said he believed that the then voluntary price regulation scheme was an excellent system. I believe that that is still the case.

My Lords, I assure the noble Lord that it is the Government's intention to achieve a voluntary system of price regulation. The incidents which he described strike a chord with me. I was a Member of another place at the time when the legislation to which he refers was debated. My constituency had considerable pharmaceutical industry interests and I was party to some of the debates and arguments at that time.

My Lords, I compliment the Minister. I do not know whether the noble Baroness, as a lay person, is involved in science and the law. Certainly I am neither a scientist nor lawyer; I am a mere accountant. If one gets involved with patents and in particular pharmaceuticals, one can find oneself in considerable difficulty. I believe that at that time the Minister represented Welwyn and Hatfield.

In July 1998 the PPRS was given considerable praise by the Minister's right honourable friend in another place. In a reply in October last year the noble Baroness appeared to apply the brakes slightly. I believe she said at that time that she looked forward to full compliance with the scheme and more transparency. I hope that under the existing scheme there are enough avenues by which the Government and the Secretary of State can discuss what is and what is not reasonable price or profit, let alone transparency, in the figures and costs. I am sure the noble Baroness and her right honourable friend are aware that, in looking at prices, profits and return on capital, one is attempting to aim at a moving target, because most of the large pharmaceutical companies have global interests.

Perhaps I may be the first speaker today to ask the noble Baroness to glance at the happy pale green paper—the Bill. The noble Baroness will see that Clause 27 bears the title "Power to control prices". That is absolutely fine. However, one wonders why there is to be a power to control prices. From the studies that I have made and the representations that I have received over the years, the pharmaceutical industry has looked at return on capital and profits as well as prices. Is this a new departure?

I ask the noble Baroness to look at Clause 28 (4) which states:
"The scheme may provide for any amount representing sums charged".
Is that meant to be prices? If not, does it mean something else? Perhaps the noble Baroness can write to me about that or perhaps we can return to it at Committee stage. In subsection (5) reference is made to "amount representing the profits". That appears to me to be very much tie language of the existing scheme. The scheme has developed under all governments over the past 42 years.

Clauses 26 to 30 remind me of the philosophy of the great football team that I know is supported by the family of the noble Baroness. Much of its attitude can be described as "fee-fi-fo-fum". It tends to put itself forward in that way. Perhaps the noble Baroness will turn to Clause 31. Subsection (3) makes reference to the power to make regulations,
"under any of those provisions or section 30 may be exercised generally …"
That removes half of the "fee-fi-fo-fum" and threat. One wonders what "generally" means and whether her great football team is turning into a team of tabby cats. However, in subsection (4) one sees that the powers conferred may be controlled by reference to the
"prices or profits which would be reasonable in all the circumstances".
That appears to remove most of the threat or in terrorem Clauses 26 to 31. Indeed, the football team may be tabby cats that roll over to have their tummies tickled.

One wonders how the last two subsections of the clause can be reconciled with some of the thoughts and remarks made about the Pharmaceutical Price Regulation Scheme. Alas, when I rose to my feet the noble Lord, Lord Macdonald of Tradeston, was not here. However, perhaps he or the noble Baroness can advise me on one matter. I believe that the PPRS now applies to Scotland or that it is intended to do so with the coming into being of the Scottish Parliament. Perhaps I can be advised as to that. If not, I can return to it at Committee stage.

I should like to touch on two other subjects: first, what may be described as the rationing of healthcare. There are continuing discoveries in both medicine and medical practice. One always finds new cures and remedies for existing diseases. I remember one example in my home town of Angus which is very relevant to Scotland. I understand that beta-interferon can considerably help those who suffer from multiple sclerosis. One particular friend who suffered from this condition discovered that he was unable to have treatment with beta-interferon because he lived in Angus but that had he lived in Fife or other areas where there were different views about the clinical effectiveness of this treatment he would have received it. That is one particular problem that perhaps we will be able to consider. I am sure that the Government take that on board. It is an aspect to which I may return in Committee.

The last item to which I refer is waiting lists. This is always a point of discussion that tends to evoke a considerable amount of heat in your Lordships' House. My noble friend Lord Skelmersdale made reference to this matter in his speech. I read about waiting lists for elective surgery. But space must also be reserved in hospitals for winter and summer emergencies. If one watches television or listens to the radio in the summer one is told that the pollen count will be so much. There are also winter emergencies. As to the latter, five weeks ago today I was not in your Lordships' House but skiing in Switzerland. At 10 o'clock in the morning an emergency helicopter arrived. I and others were informed that it had picked up someone who turned out to be my noble friend Lord Astor. Five weeks ago he suffered a winter emergency. Thanks to the wonderful treatment that he received in Switzerland we see him back here thriving and alert with the occasional clatter of crutches, which is by the by. That is a typical winter emergency which can happen elsewhere. But if a winter emergency occurred anywhere within the National Health Service I am sure that it could provide as good a treatment as that received by my noble friend.

I may be about to be visually challenged because I am now into my fourteenth minute. I very much welcome parts of the Bill. I shall have a little more to ask the noble Baroness in the course of Committee stage. I thank her for presenting the Bill so clearly today.

7.20 p.m.

My Lords, as the penultimate "run of the mill" speaker, I shall be brief and stick to the substance of the Bill. If I were sitting on the other side of the Chamber, I should probably describe the Bill as a "ragbag" of assorted fragments of legislation. However, as a loyal supporter of the Government, I should welcome it as a treasure chest full of finely crafted gifts. In fact it is more like a lucky dip in that while feeling around at the bottom of the bran tub one can discern the general outline of its separate packages, but the detail is a little less easy to make out.

In his reasoned amendment, the noble Earl, Lord Howe, is critical of the lack of detail in certain clauses relating to primary care trusts. I find his amendment rather grandiose in its wording. It calls for government amendments, but as the noble Lord, Lord Clement-Jones, and others have pointed out, surely the time for that is during the next three stages. Is that not their very purpose? I am sure my noble friend would be helpful and accommodating about the Bill if approached in a constructive way by the noble Earl, possibly outside the Chamber. The noble Earl's amendment may be unnecessarily confrontational, in particular at this early stage. There seems to be quite a lot of meat about the structure of primary care trusts in the relevant clauses, Clause 1 to 7, and in Schedule 1 as well as in the existing legislation to which the Bill refers appropriately, as the Minister pointed out.

However, I have to report that the British Medical Association is rather unhappy about the omission of some details. Perhaps the Minister could be a little clearer in her explanation of why, for instance, the detailed composition of primary care trust management boards has not been spelt out on the face of the Bill. I am sure she has read the comments of the BMA, but for the record it says:
"It is essential that healthcare professionals have the same level of input to, and influence over, the development of local health services as they have been given in Primary Care Groups"—
which of course are now taking shape throughout the country without any special need for legislation. Further BMA concerns about omissions from the primary care trust clauses as they stand include the future status of the local medical committees as representing all local GPs, and the mechanisms for seeking professional advice on commissioning decisions. Other noble Lords have mentioned that.

A particular point that needs to be addressed is the need for high quality public health advice, both in measuring and assessing the health needs of the population through epidemiological expertise, and in contributing to health improvement programmes. The BMA is anxious to know whether the Government intend to make it a statutory duty of a PCT to involve healthcare professionals in decision making as it is with other health authorities. It would be helpful if my noble friend can state the Government's intentions in that area. There seems to be a good case for including such a requirement on the face of the Bill.

Like my noble friend Lord Desai, I am interested in the mechanisms for distributing resources to cope with varying degrees of deprivation both between and within primary care trusts. Populations vary; some will be 100, 000 in number. My noble friend has written to me about that, but the response is rather detailed. It would be useful if it could be spelt out more clearly.

Perhaps my noble friend can explain a problem with which I have a little difficulty. It concerns the "independent contractor" status of most GPs and the fact that they are contracted to give services to the National Health Service and are therefore technically "providers". At the same time they will be, initially in primary care groups and then as part of PC trusts (if those come into being), commissioners of hospital services but also of community and primary care services. The split between commissioners (previously known as purchasers) and providers will then be ended despite the Government's stated intention to retain that part of the 1991 legislation. As local GPs will be involved in PCT management board responsibilities, they will in effect be commissioning their own services. The noble Baroness, Lady Thomas of Walliswood, referred to that, as did the noble Lord, Lord Clement-Jones, and others. As a former GP I can well see the advantage of that, but perhaps some sort of "arm's length" mechanism needs to be built in.

Another untidy area involves the boundaries of PCGs and PCTs. Patients do not necessarily register with a doctor in the same catchment area as their home. Many GPs have sizeable parts of their registered practice population living in a different health authority. Practice lists are notoriously inaccurate. especially in inner cities where there is rapid population turnover. That will make it difficult to allocate appropriate resources to PCGs and PCTs. The problem is well discussed by Drs. Gilley and Majeed in the British Medical Journal of 16th January. I hope that the Department of Health will take good note of those helpful articles.

I am quite pleased with much of the remainder of the Bill, in particular the establishment of CHIMP (Clause 14) and, by implication, NICE, although it is not in the Bill. However, best of all is the provision in Clauses 22 and 23 for financial co-operation between local authorities and health authorities. That was well described by my noble friend Lord Warner from his personal background with the social services directorate in Kent. That provision should greatly improve community care and, among other advantages, may speed up the discharge of elderly patients blocking beds. I hope that it will prove to be a further step in the realisation by Government that healthcare and social care merge imperceptibly; or, to put it another way, they overlap. In the community they do so almost from end to end.

I share the anxiety expressed by the noble Lord, Lord Walton, and others, about Clause 47 and Schedule 3. The new powers to amend the regulation of the health professions by Orders in Council are accepted by many of the professions as necessary. But not only the BMA but other professions are worried that under paragraph 8 (1) of Schedule 3, the Secretary of State could theoretically set up a new professional regulatory body, with the Government paying for it, which would then not be independent as is the GMC now. John Denham, the Minister concerned, has reassured the BMA that the Government would not use that power. However, without that assurance being written into the Bill in some way, a future Secretary of State could bypass the GMC or any other self-regulatory body. I hope that my noble friend can agree to discussions which might lead to a small amendment which will recognise the Government's support for the principle of self-regulation and the protection of the General Medical Council. That will be reassuring to all the healthcare professions and would lead to a continued fruitful working relationship between them and the Department of Health.

7.28 p.m.

My Lords, I thank the Minister for her explanation of the Bill, and my noble friend Lord Howe for his lucid dissection. I speak on the Bill as a lapsed, hands-on nurse with many medical friends. The National Health Service, under the stewardship of the Conservative government for more than two-thirds of its existence, has during that time conserved its principles, increased its capabilities, built up and founded good practice and kept up with the rapidly changing face of medicine, technology and the nation's expectations. There is a good foundation on which subsequent governments will continue to build by responding to the changing demands of healthcare and its administration.

The Bill, setting out what the funding of £21 billion is supposed to cover, heralds yet another huge set of pressures on those who administer the service. The legislation and its provisions will never cover the enormous costs engendered either in financial terms or in terms of the potential health risks to the hard pressed, conscientious, compassionate executives, clinicians and caring staff; in fact, all who do their best to promote the health of the nation already under great pressures.

There are far too many radical proposals to carry out at once when, inevitably, there has to be a different reallocation of funds nationwide. So, for example, the search for ways of making more beds available, already a very fraught problem in every area, will still not be possible because, as in East Gloucestershire, the money has been reduced but expenses have been increased. We have seen, for example, the funding of the much welcomed pay award to nurses; financing of the new working time directive; and paying for up-to-date proven drugs. Those are but a few of the mounting needs with their associated high cost. There are no powers to run a deficit; the long suffering public pay the price.

I understand that my own area health trust is dismayed by the huge pressures it will have to bear to deliver an adequate health service. The shift of emphasis from treatment to prevention is acknowledged to be the next sensible step in improving the service and is generally welcomed. But the treatment must go on and it is expensive. How can the problem of affording proven treatment be resolved? Thousands of lives are lost every year. Young lives are cut short. What will be said to the parents of young children who are not sufficiently well off to afford the £9, 000 drug needed to allow them to bring up their family and not otherwise available to them? Nowadays, people know what is the proven treatment before they visit their GP or consultant. What a dilemma!

When doctors, nurses, patients and their relatives perceive an inefficient hospital trust administration, resulting in bad practice, unhealthy conditions regarding cleanliness, low staff morale and patients' food left untouched, to whom can they turn? Who should they ask to improve conditions? What inspectorates are in place to deal with the situation? Perhaps the new commission has been created for this purpose.

The noble Baroness, Lady McFarlane, expressed the same regret that the regulation of healthcare and associated professions has been relegated to the heading of "Miscellaneous and Supplementary". I would welcome what is listed in Schedule 3, paragraph 1 (c) (e) and (f) appearing in Clause 47. That would cover education and training before and after admission to practice; standards of conduct and performance; and discipline and fitness to practice.

I wish to comment briefly on the welcome new strategy for nurses, the super nurse. Have any been appointed yet? By all reports, nurses are in very short supply, resulting in under-staffing. Therefore, wherever nurses are employed they must be working flat out to the best of their abilities in the time they have available. They must have worked out before they joined the service the maximum number of hours they have available. How can they be expected to do even more, even better, without crumbling under pressure? It is a release from pressure that is really needed in all the services.

So yes, we need more nurses, but let us be choosy about recruitment. How carefully are prospective students vetted? There have been reports of a few lazy, insubordinate and intimidating staff in hospital wards. I feel that there should not be an indiscriminate choice of candidates to make an impressive statistic. We are lacking a grade of nurses trained by the bedside both clinically and compassionately, bringing out the practice of common sense for the relief of suffering, including a concern for the anxieties of patients suddenly whisked out of their homes and into unfamiliar surroundings.

By "clinically trained" I do not mean to intensive care standard. That is superbly carried out by our graduate nurses under Project 2000. This new grade of nurse should have as part of her duties the responsibility of helping patients to feed and ensuring that they take nourishment. I know for a fact that this does not happen in every hospital. It is not a difficult thing to do, but it is absolutely vital to recovery. And there is another duty. Everyone who has ever had to spend more than a day in bed knows the feeling of the "numb bum". Why has the practice of preventing bedsores by regular massage by nurses been stopped? It is all part of a constant communication between staff and patients. If the disciplines necessary are neglected, hours and hours can go by before a critical condition is noticed. Very often people suffer in silence.

I conclude with the first step into treatment by the National Health Service—the general practitioners. They are well trained, hard working people and the pressures on them mount daily as they are required to do increasing amounts of paperwork. It is not a new problem, but it is getting worse by the day. Their precious time is needed for footwork, not form filling of every type and description. GPs have expressly voiced that concern. Is it all really necessary?

7.37 p.m.

My Lords, we have had a wide-ranging debate today which befits the Second Reading debate of a major plank of the Government's legislative programme. As might have been expected, the debate has concentrated on six areas. The first is the three key features of the Bill; the abolition of fundholding GP practices and their replacement by primary healthcare groups and subsequently trusts; and the duty of quality and the duty of partnership. We also debated the Pharmaceutical Price Regulation Scheme; Part II of the Bill which relates to Scotland; and Part III, which is the notorious Clause 47. In winding up from these Benches, I wish to touch briefly on all six issues.

As was clear from the contributions of my noble friends Lady Thomas of Walliswood and Lord Clement-Jones, we on these Benches support the abolition of GP fundholding and its replacement by a broader grouping led by the primary care interests. That said, we have some real reservations about the detail of the Bill and those have been echoed by other speakers in the debate. As my noble friend Lady Thomas said, there is a considerable learning process to be experienced whenever one makes radical changes in institutions. It is by no means clear that the Bill has allowed time or resources for those learning processes, be it the transition from fundholding to primary care groups or the subsequent transition from primary care groups to primary care trusts.

Secondly, as quite a number of contributors to the debate noted, there is considerable vagueness in the primary care trust arrangements. They mix the purchaser and provider role. It is not clear whether cash limits will be imposed and, if so, how they will work. Finally, we are extremely concerned about the governance issues. Who will sit on primary care trust boards? What is the role for the profession? That issue was raised by a number of noble Lords. What is the role of lay members? None of that is clear.

As we have made clear, one of the reasons why we welcome these proposals is that our vision has long been one that would bring together the health service at the local level with local authority social services to provide that seamless web of care services and, indeed, to emphasise the role of public health issues—housing, environmental services and education—as major contributors to the health of the nation. Those issues were stressed by the noble Lord, Lord Rea, in his speech.

In other words, for a long time we have wanted to see joined up thinking about health and social care at the local level. But in doing that, I should also like to take on board the issues raised by the noble Lords, Lord Walton and Lord Winston; that is, that it is important to include secondary care as part of the same continuum. One of the faults of the original National Health Service was the separation of the hospital service from primary care, so making the NHS hospital-led. One of the benefits of GP fundholding was to turn that relationship on its head. As the noble Baroness, Lady Fookes, pointed out, it was the GPs who then called the tune. We hope that the primary care trust will maintain the bias that the service should be primary care led. But it is extremely important that the primary and secondary sectors are complementary to each other rather than antagonistic to each other.

Given our welcome for the wider remit of the primary care group and primary care trusts, it is not surprising that we also welcome the second main principle embodied in the Bill; that is, the duty of partnership. But again, there is uncertainty as to precisely what is a duty of partnership. Are the proposed health improvement plans any more than motherhood and apple pie? Like the noble Baroness, Lady Pitkeathley, said, we would wish to see the duty of partnership extended to voluntary sectors and to carers. As we all know, they are essential contributors to today's National Health Service.

I come to the third keystone of the first part of the Bill—the duty of quality. Again, we welcome that commitment. But as my noble friend Lord Mar and Kellie emphasised, it is outcomes not inputs that we should measure in terms of quality. As the noble Baroness, Lady McFarlane, emphasised, we need to set standards not only for medical practice, but also in terms of nursing and care standards. But once again there is a considerable element of vagueness in the Bill. How do we measure quality? Why is the commission for health improvement to inspect the primary care trusts and the hospital trusts but not the health authorities? Will the commission's report be made public? What is the relationship between the commission for health improvement and the Audit Commission?

That last thought raises a further issue about the proposals which worries me. Perhaps because I come from the education sector, whenever I see something that has a monitoring or inspecting role, Ofsted raises its head. One of the problems with the Conservative reforms of the 1980s which introduced market disciplines into the public sector was that we found ourselves being expected to go out into the marketplace and compete and at the same time meet an increasingly detailed set of targets. In effect, the command economy was there and the market economy was there. But I wonder whether, as a nation, we are in danger of going overboard for inspection and monitoring of these things; for naming and shaming. In the very good speech of the noble Baroness, Lady Cumberledge, she stressed the importance of the health service as a trust relationship. That is vital. But too much inspection can undermine morale and break that trust relationship.

I should like to speak briefly about three other aspects of the Bill that were discussed today. First, the pharmaceutical price regulation scheme. In my academic role, I have undertaken many studies of the pharmaceutical industry. What I find fascinating about that industry is that it is the only one in the United Kingdom where we have had a consistent industrial policy for almost 40 years. Because we have had a consistent policy, we have managed to build an industry that has become a major player on the global scene.

Going back to the 1980s, Glaxo was a family firm selling dried milk; Wellcome was a company that was not very large and uncertain as to whether it had a public role or was a private company. ICI only began dabbling in pharmaceuticals in the mid-1950s. All those companies, in their different ways, have now become world leaders. An important part of that has been that we, in this country, provided consistent support for the industry. That support has come through the pharmaceutical price regulation scheme. We pay more for our drugs than France and Spain, but we have benefited greatly from new and innovative drugs which have been introduced and developed in this market. They have drastically reduced the cost of the National Health Service itself. For example, Tagamet and Zantac totally transformed the situation in relation to stomach ulcers and, more recently, EPO replaced the need for blood transfusions.

The industry also provided a major stimulus for research in the life sciences in this country. It has been a mutually reinforcing relationship. As the noble Lord, Lord Walton, stressed, we have attracted a great deal of foreign direct investment in this sector—investment in research and development which is high quality investment bringing good quality jobs. But they have come because we have an excellent science base. The industry has contributed also to that science base. It is indeed one of the few examples in Britain where excellence in science is translated into technological and commercial advantage.

We would be ill-advised therefore to throw away a scheme which, to my mind, has benefited the industry so substantially. But that said, there are limitations. The noble Lord, Lord Ewing, emphasised the fact that their profits are considerable and there are occasions when the industry has been known to overcharge. I do not believe the scheme; provides enough incentives to keep costs down and the whole process is much too secretive. It should be, within the limits of commercial confidentiality, much more open and above board. But having said that, it is important that we do not throw the baby out with the bath water. We on these Benches would favour the retention of a voluntary scheme, if possible. We do not like the idea of a hybrid scheme, half voluntary and half statutory. If a voluntary scheme cannot be negotiated, we feel that there should be a statutory scheme.

I do not want to say much about the health service in Scotland because that is not an area that I know much about. The point made by the noble Baroness, Lady Carnegy of Lour, struck me as interesting: that is, how extraordinary it is that such extensive changes are being proposed now when in five months' time the responsibility for running the health services in Scotland will rest with the Scottish Parliament. That said, exactly the same criticisms seem to apply to the provisions relating to Scotland as to those relating to England and Wales; namely, that they are still too vague and we do not know precisely what is being proposed.

I turn to Clause 47 and Schedule 3, the so-called Henry VIII provisions. I was struck by the remarks of the noble Baroness, Lady McFarlane, when she said how appalled she was that the Bill could appear without waiting for the consultation process with the professional bodies to be concluded. That, together with the fact that so much is left to delegated powers—even if under the affirmative resolution procedure—makes that clause extraordinarily unsatisfactory. The Bill should specify the key elements in the Government's structure.

From these Benches, there is broad agreement with the general principles of the Bill, but the devil is in the detail—perhaps I should say that the devil is in the lack of detail. We disagree with much of that detail. My noble friend Lord Clement-Jones made clear from these Benches that we do not support the amendment. We believe that the deficiencies in the Bill should be dealt with in Committee and be challenged then by amendment and the process of debate.

7.52 p.m.

My Lords, I, too, thank the Minister for her clear exposition of the Bill and, as my noble friend Lord Skelmersdale mentioned, for the Explanatory Notes. I am grateful also to my noble friend Lord Lyell for declaring my interests in the National Health Service!

As I listened to Labour Peers attacking the GP fundholding concept I was left wondering whether they had ever spoken to Professor Brian Abel-Smith, one of the most brilliant advisers the Labour Party ever had. He told them, "Whatever you do, don't get rid of GP fundholding because it has been a success". How sad that the Government did not accept his advice.

The beauty of GP fundholding was that it was voluntary. That was a sensible arrangement because GPs are independent contractors. To be fair to the Government, the Labour Party's White Paper said that fundholding had brought real benefits to patients, as my noble friend Lord Howe mentioned.

The Labour Party's answer to GP fundholding is to have a compulsory system whereby groups of between 50 and 100 GPs are dragooned into primary care groups. I was fascinated by the speech of the noble Lord, Lord Desai. I believe that he is absolutely right when he says that between 50 and 100 GPs in such a group would be far too many. It is difficult enough to get five professionals to agree on anything, let alone 50 or 100. I am sure that that applies to economists as well as to doctors.

General practitioners will no longer be able to act individually. It is very likely that the system will reduce the ability of GPs to offer such a wide range of services, reduce their ability to secure improvements in the hospital service, and tend to reduce incentives for them to provide a more efficient service.

We on these Benches have the distinct impression that the Labour Party is rather hostile to the freedom which general practitioners have been enjoying. Sadly, the way in which the resources will be allocated will leave little room for incentives to make the savings at practice level as efficiency gains will tend to be swallowed up by the whole primary care group.

As has been mentioned, the combination of national institute for clinical excellence best practice guidelines plus the cash-limited prescription budgets will certainly shackle the GPs' ability to decide what is the best treatment in the best interests of the patients. Behind all that there is a feeling among GPs that the Government want to shift on to the profession the blame for the present rationing and that those in the profession will carry the can for the rationing imposed by Whitehall.

The Labour Party has always criticised GP fundholding as being a two-tier system for patients. However, as many noble Lords have pointed out, the Government are introducing a four-tier system. Dr. John Chisholm, chairman of the British Medical Association's GPs' committee, stated:
"People in different parts of the UK will receive different levels of service".
The problem is that, whereas with GP fundholding patients were usually able to choose the fundholding GP, under these arrangements there will be no choice; patients will simply be assigned to the primary care group on the basis of where they live. As has already been described, it will be a four-tier service on the basis of the postcode.

I have always found curious the Government's claim that they are abolishing the internal market. I thought that the Labour Party had turned its back on nationalisation and was in favour of the marketplace. However, as the noble Lord, Lord Desai, hinted, the Government have not abolished the internal market; they have retained the purchaser/rovider split which is the essence of an internal market. The window-dressing which they have used is to say, "The evidence that we've abolished the internal market is that we have a new statutory duty of co-operation. Our health service trusts will be legally required to work in partnership".

Clause 19, as we have mentioned already, states that it is the duty of health authorities, special health authorities, primary care trusts and NHS trusts to co-operate with each other in exercising their functions. How on earth will that be enforced? As my noble friend Lady Fookes pointed out, that sounds like a lot of waffle. Perhaps the Labour Party might try to extend the principle to other parts of the market, such as the commercial world, encouraging companies to co-operate with each other in exercising their functions.

Many references have been made to CHIMP and NICE. CHIMP is the body responsible for enforcing guidance produced by NICE. The set-up will certainly provide the Government with a means of increasing rationing, but will the search by NICE for evidence-based medicine include the various branches of alternative medicine?

As regards the role of CHIMP as a device for monitoring clinical quality, it will have the powers of absolute privilege in respect of any publications. It seems that CHIMP will have wide-ranging powers and functions, including a power to enter and inspect NHS premises at any time and force the compilation of reports. Failure to comply could result in conviction and a fine. The profession increasingly sees that as a severe threat to its autonomy. The BMA's chairman, Dr. Ian Bogle, pointed out that CHIMP could lead to doctors losing their clinical freedoms. I think he is right.

For many noble Lords—including the noble Lord, Lord Walton of Detchant, the noble Baroness, Lady McFarlane of Llandaff, and my noble friend Lord Howe—the most ominous parts of the Bill are Clause 47 and Schedule 3, which will enable the Secretary of State to undermine the whole structure of self-regulation by ministerial decree. That is most worrying.

Many of us have been state employees for a long time but it has not felt like it. The new regime will feel very oppressive. It is not only doctors who will be affected by these draconian measures. They will affect other health professions not already under statutory regulation and could extend to new professions that have not yet emerged. An Act of Parliament will not be required but only an Order in Council. The Government have reacted in a knee-jerk fashion to recent cases that received an enormous amount of publicity, such as Bristol. It seems that the Government are seizing the opportunity to reduce the independence of the medical profession. That will impair the doctor-patient relationship, and will ultimately be harmful to patients.

I cannot help wondering why the Government are involving themselves in this great upheaval when the real problem is morale. The noble Lords, Lord Walton and Lord Winston, pointed out that there is no mention in the Bill of the university side, which desperately needs more resources and encouragement. The noble Lord, Lord Winston, mentioned that my noble friend Lord Howe had spoken about GPs and clinicians. I should explain that my noble friend is a distinguished classicist and knows that "clinic" is a Greek word meaning bed, so clinicians are bed people. That explains a lot. GPs do not tend to have beds.

As to morale, thousands of patients are demoralised. They have been denied NHS operations for varicose veins, sebaceous cysts and lipomas. Many of those people are poor and cannot afford to have their operations done privately. Why do the Government continue refusing to help those poor people? Why cannot the Government use some of the £22 billion that they keep telling us about to allow those operations to be undertaken by the NHS? Are they worried that would increase the number of patients on waiting lists?

Another source of poor morale in the NHS is the gross imbalance between the number of consultants and junior staff. There are far too few consultants and far too many junior staff. Even worse, they have been training for 20 years and, at the end of it, they find that they have no job. The NHS is a monopoly employer so there is nowhere for those people to go. What an appalling waste of scarce resources and a tragedy in human terms. What are those junior staff supposed to do?

Last week, the Minister kindly wrote to reassure me that none of those junior staff members would be out of a job. I recommend that she speaks to the 13 or 14 postgraduate deans, who have a very different story to tell. There is a desperate need for more consultants in psychiatry, accident and emergency, cardiology, cardiac surgery, oncology, palliative care and obstetrics. Why do not the Government make a serious effort to create 20 or 30 more consultant posts in all those specialties this year, bearing in mind that £22 billion is available? Will the Minister provide some hope for those beleaguered junior staff members? They have made a great contribution to the service. If the Minister could take steps to increase the number of consultants, it would go some way to reassuring the NHS at a time when it is reeling from the prospect of this draconian Bill.

We look forward to the Minister's replies to the many questions that have been asked and fears expressed about the Bill. We particularly look forward to a detailed answer to the amendment proposed by my noble friend, Lord Howe.

8.5 p.m.

My Lords, when speaking in your Lordships' House one often has the feeling that one is stepping through a looking glass, if not in Wonderland. The idea of an NHS reeling from the threat of this "draconian Bill" bears little resemblance to reality. In the real world of doctors and nurses, they are more interested in the pay review, a successful recruitment campaign for nurses, the day-to-day conditions in which they work and the pressures, as we all recognise, that they face.

This important Bill deserves scrutiny and many detailed issues have been raised in the debate. I hope the House will understand that I shall not be able to reply to every point in the course of this speech but there will be many opportunities to deal with them in the later stages of the Bill's passage through the House. There will be facilities for any noble Lord to discuss specific points of clarification.

I do not deny that the Bill is complex. I am grateful to the noble Lord, Lord Skelmersdale, and others for their kind comments about the explanatory notes. Even so, we are dealing with complex legislation that amends previous legislation, which itself amended previous legislation. I hope that a meeting before Committee stage will be helpful in dealing with points of clarification.

I do not deny for a moment that serious issues have been raised to which I alluded in my opening speech—perhaps predominantly that of self-regulation. That is a real concern to the professions, government and patients. After all, the Bill is about ensuring safety for patients. It is in everybody's interests that we get those issues right. I look forward to debating the detail. I listened intently to the comments of the noble Lord, Lord Walton, and the noble Baronesses, Lady McFarlane and Lady Emerton. We will not only scrutinise but may change the Bill in the course of its passage to achieve what I believe are mutually agreed aims. That is absolutely appropriate for the way in which your Lordships' House conducts its business.

I have to say that I found it uncharacteristically provocative of the noble Earl to table an amendment at this stage in the passage of the Bill.

That technique has not been used in your Lordships' House since 1985.

My Lords, perhaps we will both go back and look at our precedents—but it has not been done for some years. I hope that it is not a reflection--if I may take up the football metaphor of the noble Lord, Lord Lyell—of the hooligan tendency on the Conservative Back Benches permeating to the Front Bench. It would not be the most sensible way to deal with these particular issues. We welcome detailed scrutiny of the Bill and want to look constructively at any suggestions about how we might better achieve the objectives we have outlined.

In my opening speech I said that we would certainly want to take into account the views of the Delegated Powers and Deregulation Committee and weigh very carefully anything it has to say on the topic. However, in regard to the reasoned amendment and primary care trusts, perhaps I may reiterate that the legislative approach taken in the Bill is well in line with the approach that governments have taken over many years to NHS legislation. Indeed, it is expressly intended to accommodate primary care trusts within the general framework of NHS legislation as it has grown up over the years. We believe that that is the right approach to accommodate primary care trusts within NHS law and that it will enable them to evolve in response to local circumstances, thereby building on their own experience, as we promised they would do. It is very much part of a developmental agenda, which I believe was the thrust of some of the arguments about radical reorganisations not being in the interests of the service. If we want to retain some of that flexibility, there are prices to be paid.

It is for all of us as legislators to debate where the right balance is struck in terms of every detail being put on the face of the Bill. Of course, it is the putting of every detail on the face of primary legislation which has led us into some of the difficulties that the professions have encountered in their concern to be able to amend the legislation that deals with professional self-regulation. Again, we are trying to strike the correct balance between enabling legislation and the right kind of safeguards which need to be there.

Therefore, this is nothing to do with draconian powers and nothing to do with attempting to obfuscate; it is simply ensuring that we avoid the welter of technical and administrative detail for which legislation is often criticised. We must ensure that flexibility exists to respond quickly to changing circumstances and that we enable detailed administrative arrangements to be readily updated over time within structures and principles set out in parliamentary primary legislation. We must also allow flexible timing to develop, consult on it, and modify secondary legislation over time. In the light of that explanation, I hope that the noble Earl will think carefully about whether it is really the most sensible and the most considered way to proceed to press his amendment to a Division.

I made reference to the complexities in the legislation. The noble Baroness, Lady Carnegy, kindly gave me notice of the specific question she would ask on Part II of the Bill; namely, whether we could provide a Keeling schedule for the Scottish provisions. I should like to take that suggestion back and consider it with the parliamentary draftsman to see whether it is possible. I shall write to the noble Baroness on the matter.

My Lords, I am very grateful to the Minister for her agreement to my request. However, can she also agree to our having a draft of such an amendment before the Committee stage? In that way we would know what we are talking about as regards Part II, because it is not self-evident from the Bill.

My Lords, I shall certainly consider both those issues. I am grateful for the noble Baroness's intervention because it has allowed me to clarify the position about the last time such a reasoned amendment was tabled. I suspect that we were both right, but certainly I was right to say that 1985 was the last time that an Official Opposition tabled such a reasoned amendment.

My Lords, does the Minister agree that that was not the last time that it was used? It is irrelevant whether or not it was used by the Official Opposition. It has been used since then by other Members of this House.

Yes, my Lords. Because minority factions have employed such tactics in the past, and because they are now so decimated, the noble Lord seems to think that it is the sort of guerrilla tactics in which the Official Opposition should take part. However, I move on as I am anxious to deal with some of the specific issues which have been raised.

I shall deal now with one of the fundamental issues which was inherent in the speech made by the noble Lord, Lord McColl. I refer to the accusation that, in some way, there is an ideologically driven change of structure that takes away improvements created in the past. I reject that totally. I believe I said very clearly that, in recognising some of the benefits that have come with fundholding and with collective commissioning arrangements, the Government are trying to build on such improvements. But it is absolutely crucial and central to our purpose that we intend to bring those benefits to all parts of the population. We shall not do so in a spirit of levelling down, but in a spirit of ensuring quality across the board. It is not part of an ideological compulsion but absolutely a matter of principle that we do not believe that the mechanisms of the market are the most appropriate way to ensure equality of access to high quality care in a complex and much cherished public service like the NHS. That is central to what we believe.

I took note of some of the remarks made by the noble Earl, Lord Howe, when he said that he mourned the demise of GP fundholding. For example, he said that it would no longer be possible to shop around for a hospital where the care is better and that hospitals would not be on their mettle in case another hospital captured their business. That is not the way to drive up standards within the NHS. We firmly believe that issues of co-operation and collaboration are what actually deliver in terms of quality for patients and in terms of cost-effectiveness. It is on the basis of ensuring that the population as a whole can benefit from high quality services that we are taking this legislation forward.

I should like to deal briefly with some of the issues raised about primary care trusts. I believe that there has been a real welcome for the way in which these will put doctors and nurses in the driving seat of community health services. I take the opportunity to confirm that nurses are already able to chair primary care groups and that some have been appointed to do so in St. Helens and Knowsley and in south Cambridgeshire. Moreover, every PCG must have at least one nurse on its governing board. I know that there is interest in the arrangements; indeed, there has been wide consultation on the way forward. My honourable friend the Minister for Health hopes to have more to say soon in that respect. It will be important to balance the need for strong professional influence and involvement with the proper requirement for public accountability and local involvement in any public body responsible for large sums of public money. Getting those arrangements right and getting the balance right are issues to which my noble friend Lady Pitkeathley, and other noble Lords, referred.

I turn now to some of the other issues raised. One of them was mentioned most potently by my noble friend Lord Winston when he talked about PCTs. He expressed a concern that, in putting this particular responsibility and authority at primary care level, it would in some way diminish the role of secondary care and, indeed, of tertiary care. I make no apology—I do not think my noble friend would expect me to do so—for the emphasis that we are placing on the perspective of the patient and the community, and the GP and the community nurse, as the persons nearest to the patient and the community and therefore best placed to articulate their needs and aspirations as regards the National Health Service. However, that does not in any way diminish the recognition that what we need are high quality services at secondary and tertiary level. We recognise the crucial role of universities and medical research. We are talking about a continuum of care. My noble friend talked about the importance, as regards cancer treatment, of ensuring that specialists are available.

I think we all know from the experience of implementing Calman-Hine that we need a continuum of care. However good the tertiary services are, if that vital first link in primary care and at GP level is not made and the patient is not appropriately referred, the system is as nothing to that patient. We should not pit one part of the service against another part. We should realise that we need to give appropriate recognition to all those parts. That is a difficult task. It is one of the reasons why we seek to involve in health improvement programmes clinicians at all levels, at primary and secondary care level, and also the voluntary groups and the patient groups and those in the community.

Several detailed points were made about the provisions in Part of the Bill in relation to Scotland. My noble friend Lord Ewing of Kirkford spoke—as ever on health matters—with great authority and knowledge. He said clearly that fundholding was never popular in Scotland—I believe that was echoed by the noble Earl, Lord Mar and Kellie—and that the Government are therefore right to build on the consensus that the benefits of primary care-centred services should be universally available. As my noble friend pointed out, primary care trusts in Scotland have been established and will be operational by 1st April. However, they cannot adopt the full range of powers without the Bill, as my noble friend Lord Ewing indicated. That is why it is important that we legislate as soon as possible. There has been much public discussion of the Scottish reforms—the noble Baroness, Lady Carnegy of Lour, referred to this matter—and since the publication of the White Paper Designed to Care the proposals have been generally welcomed. Most of them have been put in place under the existing legislation and this Bill deals with those few matters which require a change in the law.

I refer to devolution and the general point raised by the noble Lord, Lord Mackay of Ardbrecknish, who is not present at the moment. We have been careful to legislate for Scotland only where that is necessary and only where there is a clear consensus. For example, we are not legislating on joint working between health and local government as that is a matter which could rightly be dealt with by the Scottish Parliament.

I turn now to the important issue of professional self-regulation which has attracted perhaps some of the most stringent comments from noble Lords. I was not in the Chamber when my noble friend Lord Desai made his speech but I have heard reports of it. It is important that we do not view professional self-regulation as separate from the rest of the quality agenda and as something that can be dealt with separately. It is very much part of the quality agenda and part of our agenda to ensure consistency of care within the NHS. That is why I believe it is right to include it within the Bill.

We all understand that the noble Baroness, Lady Cumberlege, had to leave your Lordships' House. She said that professional self-regulation was at heart about trust between professionals and patients. She referred to a recent survey which revealed how highly trusted doctors and nurses are. My own cursory reading of that survey suggests that they are now even more highly trusted than clergymen and that the only people who are less trusted than government Ministers are journalists. I stopped reading at that point and tried to comfort myself with the thought that one can at least aspire to high standards even if some people do not think you have attained them.

I listened to the exposition of the Bill given by the noble Earl, Lord Howe. I believe that he has misunderstood what is contained within it. I make it absolutely clear that there is no intention or desire to end professional self-regulation. The powers within the Bill have been referred to as sweeping. However, we have tried to put on the face of the Bill checks and balances to ensure that there is full debate before change occurs inside and outside Parliament. Clause 48 (6) provides for affirmative procedures. We could not abolish the GMC by order, as has been suggested. That is specifically excluded by paragraph 7 of Schedule 3 which states that an order,
"may not abolish the regulatory body of any profession to which section 47 (I) (a) applies".
It is important to clarify these points and to give some reassurance in terms of the drafting of the Bill. I think that would be in everyone's interests. It is also important to be clear about our purposes. We want to work with the professions, not against them. As the noble Lord, Lord Walton, said, we have a common endeavour to modernise and strengthen the existing arrangements for professional self-regulation. I acknowledge the efforts that the professions themselves are making in this area. The noble Lord will perhaps be interested to know that the Chief Medical Officer will attend the GMC conference on revalidation and take part in those proceedings.

We do not wish to dismantle the framework of professional self-regulation. We do not wish to react hysterically—as I think the noble Lord, Lord McColl, suggested—to the real problems and concerns that have arisen concerning particular cases. However, it is in no one's interest to diminish the high esteem in which professional self-regulation is currently held. If we want to strengthen that, we have to find the appropriate mechanisms to do so. I believe that the noble Lord, Lord Colwyn, and my noble friend Lord Morris both mentioned some of the problems inherent in a primary legislation framework which seeks to do this, just as some of the problems of a secondary legislation framework have been mentioned in the debate tonight. We have to strike the right balance. My noble friend Lord Ewing and the noble Baroness, Lady Fookes, emphasised the fact that orders may not be amended by Parliament. That is absolutely right and is all the more reason for making sure that there is full consultation on any draft order and for making sure that it is right before it ever comes before Parliament. Those are some of the safeguards that we have tried to adopt.

However, I repeat once more that we seek to do something which I firmly believe is in the interests of the professions themselves as well as in the interests of patients. If there are ways in which we can improve the Bill so that it better meets the objectives that are shared between the Government and the professions, and offers reassurance on points of concern, we shall want to consider that most carefully and constructively.

I wish to mention briefly the PPRS provisions to which reference has been made. I restate that the Government recognise what has been achieved over the years of the PPRS and the voluntary agreement. However, I think it is equally recognised—my noble friend Lord Ewing referred to this and, in fact, I would not expect any of your Lordships to fail to acknowledge it—that a situation where some companies decide simply and unilaterally not to take part in the scheme and simply and unilaterally decide to raise prices that are outwith the terms that have been agreed with the industry as a whole and where there is no power to ensure compliance is not a satisfactory one.

Again, we need to look at these provisions in detail but we remain committed to reaching a voluntary agreement with the industry. We recognise the strength of a successful pharmaceutical industry in the United Kingdom. We show our support for that in a number of ways. We recognise too that the research and development on which these industries are based are in the interests of patients as well as of the country as a whole. We want to find a resolution to this issue that is actually fair to the NHS and to its purchasing responsibilities and also fair to what is a very important industry.

I am very conscious that I have not dealt with all the points that have been raised. I think we shall have interesting debates over the next few weeks. There have been criticisms that the Bill goes too far and is draconian and criticisms that it does not go far enough in terms of strengthening the links between local government and the health service. It is important that in all the mechanisms we are dealing with through this legislation we look at some of the principles behind it—the principles of improving quality and of having partnership not only between different parts of the NHS but also between the NHS, the local authorities and the voluntary groups. We should look forward, not to framing the legislation alone, but to doing an enormous number of other things that we need to do with the resources that are going into the health service. We want to see improved, more accessible and more responsive care across the board so that resources are invested in front-line staff whose contribution to the NHS is so critical. I commend the Bill to the House.

8.32 p.m.

My Lords, this has been a very interesting debate. I have listened with care to the contributions made by your Lordships and in particular to the speech of the noble Baroness. I accept entirely that in a Bill of this kind there is a need to delegate order-making powers to Ministers for the sake of flexibility and administrative convenience on what might be called routine issues. I would never seek to argue otherwise, but what I feel has emerged from the contributions of a number of your Lordships is that a Bill of this importance really ought to include a framework at least—and it is a framework Bill—for each of the major provisions within it, in order to give each of them some substance.

The noble Lord, Lord Ewing of Kirkwood, pointed out that one of the weaknesses of affirmative resolutions is that they cannot be amended. I quite agree with him. That is one very good reason why I believe we should have at least the essential features on the face of the Bill. Only if they are on the face of the Bill will we have an opportunity to amend them if we wish to do so. As it is, the Bill is silent on even the definition of primary care trusts. I really do not think it is sufficient to say that each primary care trust will be different and that we have to accept that there will be a "suck it and see" approach to setting them up. I am quite sure that each primary care trust will be different, but equally I cannot accept that none of them will have any principal features in common. I am not asking for "small print" on the face of the Bill but I am asking for principal headings so that we can all be certain of what we are talking about.

The Minister has not accepted my point—I confess that I did not hold out much hope that she would—but I tabled my amendment, which I believe is perfectly in order, and we have had a debate about it. I would just say to the noble Baroness that I do not believe it would in any way infringe the established conventions of the House if I were to ask your Lordships to agree to my amendment. However, the point about primary care trusts has been made, and made emphatically; and it has commanded considerable support from all sides of the House. I have reached the view that a Division on the issue would be superfluous.

However, I doubt very much that the fears of doctors will have been allayed by what the Minister has said this evening. The answers we get in Committee really must be better and fuller ones. Further to that, I anticipate that our debates in Committee will be considerably lengthier than they would otherwise have been by virtue of the Government's refusal to concede any part of the point I have made. Therefore, with my thanks to all noble Lords who have supported me and with the promise that we shall return to these matters in Committee, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

University Accommodation

8.36 p.m.

rose to ask Her Majesty's Government whether adequate measures and inspection arrangements are in force to ensure the safety of university students who rent accommodation.

The noble Lord said: My Lords, I am extremely grateful to those noble Lords who are going to stay tonight to take part in this short but, I think, very important debate. Perhaps I may say at the start that I have received a letter today from the noble Lord, Lord Dearing, regretting that a prior engagement has prevented his attendance here tonight. He goes on to say that he knows that students have some genuine concerns over the matters we shall discuss.

Perhaps I may also thank the noble Baroness, Lady Farrington of Ribbleton, for sparing a little time last week to discuss some of these issues with me so that, it is to be hoped, we can have a more useful and more informed debate, and indeed some more informed responses from the Government.

Since I put down this Question every student, or recent former student, to whom I have spoken has immediately identified with the issues and has given me all sorts of stories either from his or her own personal experience or from that of close friends. Furthermore, the issue has generated considerable interest and concern among students and their representatives in all parts of the country I think we have touched here on an issue of wide and great importance.

I want to say a little about the very real problems and difficulties which are causing hardship and real physical danger to thousands of young people at our universities. Then I should like to go on to suggest some relatively small changes in regulations that would have real benefits immediately. I think that in the longer term—though, one hopes, not in the too-long term—a mandatory licensing scheme for the properties that students rent is what we need.

Over half the one million full-time students in England and Wales rent flats or houses in the private rented sector. The overwhelming majority of these students live in shared houses or flats. For example, they have a room of their own and share a living room, kitchen, toilets and bath or shower. For many young students, this will be their first experience of living on their own; yet it is very clear that, frankly, many of them are living in death traps.

The English House Condition Survey 1996 found that 19 per cent. of private rented dwellings were unfit for human habitation under the fitness standard set in Section 604 of the 1985 Housing Act. Dangers include faulty or poorly-serviced gas appliances which release toxic fumes like carbon monoxide. These alone have been responsible for the deaths of at least 10 students since 1990. Other common dangers are inadequate means of escape from fire, inflammable furnishing, dangerous electrics, infestation by pests (including rats and cockroaches), inadequate facilities for the preparation of food and washing, dampness, poor insulation and poor security.

I have been in touch with the student housing officers in a number of universities. From Manchester University I was told that students have suffered badly enough from carbon monoxide poisoning to warrant court action. Indeed, from Manchester Metropolitan University we heard of a case where one young man spent a whole term quite badly incapacitated by drowsiness, missing lectures and even one important exam. It turned out that because his landlord had divided up the property in an illegal way, the student was sleeping with his head very close to a gas boiler, which was leaking fumes. Only the real luck of a spot inspection revealed the true cause of the problem. He was. in a way, fortunate; other students have died. A very common complaint to student unions is that the landlord cannot supply the legally-required gas safety certificate. This is usually a sign that the gas appliance has been installed or maintained by amateurs.

Another major threat to life and limb is collapsing ceilings. Again, amateur decorators tend to skim thin plaster on to existing thick Victorian ceilings. The plaster then dries out and pulls the whole lot down. Ceilings also collapse because of long-standing problems with plumbing or structural defects. Often the student will have reported leaking water or excessive damp problems, but no action is taken. Delays in repair work mean that in the meantime young people have to live and try to study in appalling conditions.

Many students suffer illness and discomfort from damp conditions caused by poor ventilation because windows are nailed shut, or damp courses are inadequate or because exterior brickwork needs pointing.

Every type of vermin you can think of has been reported to us. Slugs often infest damp houses; mice arid cockroaches are common; and in both London and Manchester we have had tales of pigeons infesting the lofts of students houses. Landlords are too fond of filling houses with second-hand furniture which does not comply with the new regulations. When this is combined with poor electrical wiring, lack of smoke alarms and no adequate means of escape, it is no exaggeration to speak of death-traps.

These and many other problems suggest that the time is overdue for some comprehensive solution. Liberal Democrats believe that the Government should introduce a licensing scheme for all private rented properties. Under such a scheme landlords would have to satisfy basic health and safety requirements before they could let their properties.

The evidence we received from the students' union at Livepool John Moores University made the point, which I hope the Government will take on board, that legislation heavily favours the landlord and that it is often a laborious, expensive and time-consuming process for students to pursue enforced disrepair procedures. Students are short of both money and time, and this results in many landlords simply "waiting it out" and putting off the repairs until the complaining students disappear.

I know that the noble Baroness is at least as aware as I am that we now have an increasing number of students in this country from other European Union countries. If these are difficulties for students of our own country, who speak the language well and have at least some knowledge of our systems, then it is even more difficult for visitors from overseas.

The Liverpool students also report that the council's environmental health officers are normally,

"very supportive and efficient in their function of enforcing relevant housing law and guidelines. However, they too are subject to the cumbersome policy and procedure that has to be followed to force a landlord to carry out essential repairs. In many cases, by the time government agencies or the courts are in a position to order action, the students' contract has expired."

That may be so, but the young people have just gone through nine months of a housing nightmare.

I hope that I have given some brief indications of both the kind of difficulties students face, and the scale of those difficulties, which are, indeed, nationwide. Perhaps I may now turn to at least a few of the possible solutions.

On the matter of gas leaks and carbon monoxide poisoning, we suggest that the time has come to review the enforcing regulations with a view to giving environmental health officers the same powers to enter domestic rented premises to inspect gas installations as the Health and Safety Executive already possesses in law. The plain fact is that the HSE has its hands full already with factories and industrial complexes: the EHOs, however, really could do the job, given the necessary resources.

In a similar way we would encourage the Government to re-examine the powers of environmental health departments to enforce essential repairs. Can they find some way to "fast-track" through the civil courts to force landlords to carry out essential repairs?

We have been examining examples of good practice through which students can be guaranteed a decent standard of private rented accommodation. We are aware of the good work done by regulatory agencies such as Liverpool Student Homes and UNIPOL, the pioneering student housing agency in Leeds. There are many other schemes as well.

Two schemes we looked at in some detail were run, in one case by a local authority, Lancaster City Council, and in the other by a university, the University of Teesside at Middlesbrough. The accredited property scheme set up by Lancaster City Council is a voluntary scheme which landlords are invited to join. The landlords gain in various ways: the kitemark logo which they are able to display in the front window of their properties gives them an edge over other providers in attracting new tenants; the council gives them positive advertising publicity; they get access to discounts on building supplies; they get property services from, for example, plumbers and electricians; and they get preferential arrangements for property insurance. The city council also supply model tenancy agreements.

The renters, for their part, gain handsomely, because in order to join the Lancaster scheme, landlords have to satisfy very thorough and well-thought-out requirements. Properties have to be in "a reasonable state of physical and decorative repair"; be "structurally stable" and "substantially free from dampness". There must be "an adequate level of natural lighting" and "adequate electric lighting". Proper ventilation is required, especially where gas appliances are installed. There are specifications about heating appliances, power points and insulation. A proper means of escape from fire, together with a fire detection and warning system, is also required.

Minimum room sizes are also laid down: the smallest bedroom permitted is 6.5 square metres or, as many noble Lords will understand rather better, 70 square feet. The requirement is rather larger where there is no separate living-room in the house.

The scheme functions by an initial survey of the property by the city council. Thereafter there may be spot checks by the city council, and automatic checks are carried out straightaway if a tenant complains. At the end of the third year there will in any case be a new survey of the property.

I should perhaps make it clear that this service is offered to all potential tenants in Lancaster, not just university students, although there are specific requirements laid down for properties rented to students. Students known to us at Lancaster University profess themselves very pleased with the scheme.

The other scheme I mentioned that we looked at is the head tenancy scheme run by the University of Teesside at Middlesbrough. In this case the university's accommodation service will manage the property on behalf of the landlord and guarantee to pay the rent. The university pays the owners termly in advance by cheque. They then sign a different agreement with a group of students which entitles them to occupy the property under the terms laid down in the contract. The owner is still responsible for the maintenance and insurance of the property. In the event of repairs not being carried out, the university reserves the right to authorise the repair and charge the landlord accordingly.

Before a property can be registered by the accommodation office, both gas and electricity safety certificates are required. All upholstered furniture must comply with the Furniture and Furnishings (Fire Safety) Regulations 1988.

Liberal Democrats feel strongly that the key elements of this kind of good practice need to be formulated into a national code of practice for student lettings, and that all our universities should be developing schemes along these lines—suited to their particular location and situation—so that good standards can be guaranteed. These schemes have in common the registration of rented properties with an inspecting authority. Landlords are given a checklist of all the features they need to have in place on their properties so that all the hazards I have been talking about are eliminated before the young students apply to rent them. At the very least, British universities need to have that code of practice proposing such schemes, or once the current review of the law affecting houses in multiple occupation is complete, the Government should introduce a mandatory scheme for licensing shared houses and HMOs.

Life at university for young people at the end of this century has become much more hazardous and precarious than it was at the time of our generation. Parents must also have a reasonable expectation that their daughters and sons will live in safe and decent conditions when they live away from home for the first time. I feel confident that the Government will be able to assure us at the end of this debate that serious moves are afoot to address a very serious problem.

8.50 p.m.

My Lords, I thank the noble Lord, Lord Tope, for initiating this debate and for giving us the benefit of his views based on evidence which he has collected from different parts of the country and to which I have listened carefully and with growing concern. But I note also the voluntary schemes that he mentioned which are obviously encouraging.

I should declare an interest. I am president of the University of Wales. Swansea, and the university has an excellent relationship with Swansea City Council. I have had the benefit of discussing the Question posed by the noble Lord, Lord Tope, with the student accommodation officer and also with the president of the student union at Swansea. But the views which I express are my own and they are not the views of an expert.

The main problem exists in the private sector where students or groups of students reside in a house which has not been registered with the local authority as a house in multiple occupation or in a house which has not been approved as suitable accommodation by the appropriate university or college. It seems to me that once a house has been approved or registered, that should be a guarantee to the students that its safety arrangements are in good order. On the other hand, if a house is not on an approved list of accommodation or is unregistered as a HMO, students should be on their guard from day one.

Throughout the country people are buying houses which they do up and let to students and others who share some of the facilities. Clearly, there are inherent risks of fire in any residential property but the risks are greatly increased by multiple occupation because each separately let part will make use of its own heating, lighting and cooking facilities.

I read in the Joseph Rowntree report published in 1995 that the risks of death from fires are up to 28 times higher in HMOs than in self-contained housing. To the best of my knowledge, that finding has not been challenged. If a house is in law in multiple occupation, then the local council may serve a statutory notice requiring the owner to carry out fire precaution work. The notice may also require the number of occupants to be reduced. Obviously, some of the work may involve quite considerable sums of money but plainly the protection of occupants of houses in multiple occupation against the risk of fire is extremely important.

I understand that one problem is that it is sometimes very difficult to determine whether a house is in law a house in multiple occupation. That has been defined as a house which is occupied,
"by persons who do not form a single household".
But that definition is less attractive to apply than it might appear at first sight. It requires the combination of a clear mind allied to a fine judgment and information about a wide range of considerations. Therefore, it is not surprising that there are wide variations among local authorities in their enforcement of HMO standards.

There have been a number of decisions by the courts about the definition. In particular, it was the noble and learned Lord, Lord Hailsham, who said in a leading case some 20 years ago that there is not a single test to answer the question whether in law a house is in multiple occupation. In 1995, in the case of Barnes v. Sheffield City Council, a case involving a house let by a private landlord to students attending the same university, the Court of Appeal held that there was not a litmus test which could be applied to determine the answer to the question and that regard must he had to all relevant factors; moreover, that the weight to be given to any particular factor will vary widely from case to case, depending on the overall picture. I noted that in the Barnes case, factors such as shared use of facilities, the stability of the student group and the size of the property as well as six other main factors were taken into consideration by the court. One is left to wonder whether the definition of an HMO remains unchanged. For example, should it be provided that a house providing residence for, say, four or more students—the number involved in the Barnes case—should be deemed to be a house in multiple occupation?

I accept that in applying the letter and the spirit of the law, much must depend upon the nature and quality of relationships between authorities and their officers. I mentioned that the relationship between the University of Swansea and the Swansea City Council is excellent. It should be a matter of good practice for university housing authorities and fire authorities to work together in a co-ordinated way to ensure that premises which are in multiple occupation are maintained in a fit state to be used as residential accommodation.

I accept that the Housing Act 1996 sought to address some of the difficulties. It introduced a scheme for the registration of houses in multiple occupation and empowered the Secretary of State to make model registration schemes. Today, three years on, perhaps the Minister will tell us how many such schemes have been adopted. How many registrations have been revoked? Has it been possible for local authorities, faced with many other pressing needs, to devote adequate resources to enable registration schemes to be established, inspected and monitored, and to enable them to tackle poor standards in HMOs? Does local authorities' income from registration meet the total cost of enforcement of the law? If the definition of HMO is not to be changed, will the department issue, re-write or update circulars 67/69, 12/86 and 12/93 which relate to the problem which, I believe, housing authorities still have in applying the definition of HMO. I hope that any new circular will offer guidance in terms that we can all understand.

I shall not detain the House further. I have risen, partly because of my involvement with one university and also because I believe that students are entitled to be reassured about the safety of rented accommodation. The noble Lord, Lord Tope, has raised critical issues and asked penetrating questions about which I hope my noble friend the Minister will be able to enlighten and reassure us.

9 p.m.

My Lords, I do not wish to speak for long in this debate; however, I wanted to take the opportunity not only of thanking my noble friend Lord Tope for raising this subject, but also of reinforcing some of the points that he made in his speech.

I live in a university town, Guildford, and I teach at the University of Sussex, on the south coast. In both cases, students face an enormous shortage of affordable rented accommodation. House prices and rents in London and the south east are considerably higher than elsewhere. "Affordable" is therefore an important issue. Students are of course perennially poor. These days most live on a combination of grants, loans and parental contribution, amounting to £3, 000 to £4, 000 a year, topped up increasingly by casual work in pubs or supermarkets. They live on £75 to £80 a week. They get together and share accommodation. However, by virtue of their very low incomes they are inevitably seeking flats and rooms at the lower end of the market. Because of the shortage, they are open to exploitation by greedy and lazy landlords.

I spoke yesterday to the welfare vice-president of the University of Sussex students' union. She spoke of cockroaches, mice, damp, leaking taps and blocked-up drains. These were common woes. But she had two particular gripes. One was of landlords who took large deposits at the beginning of the year failing to provide any inventory of the effects against which the deposit was supposedly paid—and failing to tell the students that this was the case—but then claiming at the end of the year that the deposit was necessarily withheld to make good depredations. The second was against landlords who promised but never quite got round to doing repairs. As she said, with the students moving in freshly in October, they start making complaints in November. Foot-dragging landlords spin matters out through the spring and, before you know it, it is May and the students are moving on in June. At that point it is not worth their while pursuing the issue because they are moving on so quickly. And of course the following October the repairs are still not done and a fresh group of students pursue the same case.

She also spoke to me about a "host family" scheme, which applies mainly to foreign language students in Brighton but is also used by the university to place first-year students who cannot be placed in campus accommodation. She said that often it works quite well, but sometimes it does not; that sometimes the accommodation is not up to scratch, but because the arrangement is informal there is no contractual relationship between the family and the student and they have no contractual rights.

These days students have a tough enough time without all these other hassles. As my noble friend Lord Tope made clear, the legal position of shared flats and houses—homes in multiple occupation—is unclear. It is not easy for either environmental health officers or the Health and Safety Executive to act. Yet the horrific cases of carbon monoxide poisoning that have come to light illustrate the dangers of doing nothing. It would be good to see local authorities following the lead of towns such as Lancaster or universities such as the University of Teesside and setting up schemes of their own. I am only sorry that the noble Lord, Lord Bassam, is not present. There is a very strong case for the Brighton and Hove unitary authority thinking of these matters and instituting a registration scheme somewhat similar to that promoted by Lancaster. As it is, neither the borough nor the university has been prepared to act. The students' union is now trying instead to go it alone, setting up a scheme which sounds rather like the scheme in Leeds whereby the union sets itself up as its own accredited letting agency. But at present the union is stymied by the lack of £20, 000, which it needs as start-up money for the scheme. It seems that neither the university nor the local authority is prepared even to help with that.

This is a very real problem. I am grateful to my noble friend Lord Tope for bringing it to our attention. I hope that as a result of this brief debate the matter may receive some publicity and something may be done about it.

My Lords, I apologise for intervening in the gap. I knew that my commitments today were uncertain and that I might not be able to arrive in time. I am very pleased that I am able to be present and take part in the debate. I have a particular interest. I once represented a Hampshire ward that includes a university. There were a lot of houses in multiple occupation surrounding the university that were inhabited by students. When, in another place, I sat on the Committee that dealt with the 1996 Housing Act I pursued many of the points that have been raised this evening. I was particularly interested in fire safety and the regulation of gas appliances. I therefore identified closely with the comments made earlier by the noble Lord, Lord Prys-Davies.

In the brief time available to me, I wish to highlight two areas. One relates to the certificates that landlords are now required by law to provide when their gas appliances have been inspected. I feel strongly about this. I raised this issue during the passage of the Housing Bill. Since that time the Gas Safety (Installation and Use) Regulations 1998 have come into use under which a landlord is required to produce the certificate and the students do not have to ask for it. That was identified as a real problem.

Secondly, I wish to pursue the issue of the regulation of houses in multiple occupation. I strongly agree with many of the comments made earlier by the noble Lord, Lord Prys-Davies. There is a huge raft of legislation surrounding regulation of houses in multiple occupation. We have already identified one duty on landlords to produce certificates when domestic gas appliances have been serviced. Landlords also have a duty to carry out repairs under the Landlord and Tenant Act 1985. They also have a duty to ensure that the furniture provided is safe and complies with the Furniture and Furnishings (Fire Safety) Regulations 1988. Landlords also have a duty to ensure good management of accommodation under the Housing in Multiple Occupation Management Regulations 1990.

Local housing authorities have powers to require works to be done to make private rented homes fit for human habitation. That comes under Part VI of the Housing Act 1985. I could continue. There are other responsibilities of the Health and Safety Executive to enforce the requirements of the gas safety regulations. Local trading standards authorities have powers to enforce the furniture and furnishing regulations.

We can see that the current regulatory framework is complex and rather confusing for landlords and tenants. It involves a great number of different enforcement agencies. As my noble friend pointed out, it leaves the enforcement of health and safety standards largely at the discretion of statutory agencies. In addition, there is the legal confusion mentioned this evening about what constitutes houses in multiple occupation. That has led to disturbing developments. The judgment has meant that some landlords appear to be actively seeking to let accommodation on a shared basis to evade the health and safety regulations since the court case that was highlighted earlier.

The second effect of the judgment has been that many local authorities are reluctant to use their houses in multiple occupation powers to inspect shared houses or even to enforce standards because they fear that they will lose such cases in the courts. Shelter carried out a survey and found that 85 per cent. of the councils surveyed thought that the legal definition of a house in multiple occupation should be amended so that shared houses are clearly included. The area urgently needs to he looked at. The current legislative framework is cumbersome. There is a real opportunity for that to happen and I hope that the Government will grasp it. I know that the Government are committed to introducing a new national mandatory licensing scheme for houses in multiple occupation. The new Labour manifesto pledged:
"We will provide protection where most needed: for tenants in houses in multiple occupation".
I served during the Committee stage of the 1996 Housing Bill in another place. At that time the Opposition spokesman was clear as to Labour's view. Labour wanted to see proper regulation. We supported each other firmly on the matter against the last government.

As was pointed out by the noble Lord, Lord Prys-Davies, the matter was discussed in some detail and promises were made three years ago. I hope that today we shall hear from the Minister what the Government intend to do. As we have heard, there have been some dreadful tragedies and many students have died.

9.11 p.m.

My Lords, the House must be grateful to the noble Lord, Lord Tope, for bringing this matter to our attention this evening. He outlined in detail many of the problems which students face when they move into the privately rented sector. It seems unnecessary for me to go into detail again on that. He also outlined some schemes which either universities themselves or authorities in university towns are beginning to put in place to rectify matters. It seems to me that those schemes deserve the greatest possible encouragement from the Government.

It must be faced that these are problems of the wider housing sector. It is not exclusively a university student problem that we are discussing. If proper standards are valid for university students, then how can they be separated from proper standards for everyone else?

The noble Lord, Lord Prys-Davies, highlighted the complications that arise because of the variable standard of enforcement applied from authority to authority over houses in multiple occupation. This is not a straightforward matter, and it certainly goes wider than simply university accommodation. That said, many universities have their own accommodation and still have problems. One university housing officer commented to me that some students, in defiance or due to ignorance, breach many of the safety regulations that are in place for their protection. That may appear to be a harsh comment but it was spoken with a certain amount of bitterness. It does nothing, however, to excuse the fact that clearly too many students must live in an environment that is beyond their control and in wholly unsatisfactory circumstances.

It is also a fact that the university authorities will need to pay increasing attention to this matter and the general question of university security and safety. It is becoming a matter of note that at conventions where universities seek to attract students parents home in on safety almost as a first item of concern. No responsible parent wishes his or her child—a student will be regarded as a child even though he or she is on the way to being grown up—to go to a university where it is believed that security and safety are not treated with adequate seriousness.

Security is a matter that goes wider than simply housing. Even where a security service is sponsored or provided by the student union, as the bulk of its funding comes from the university such expenditure forms part of general university expenditure. I am aware that one university spends between £100, 000 and £200, 000 annually just on campus security such as closed circuit television. This is designed purely for the security and safety of students. It is another aspect of university life that, sadly, must be treated with enormous care by university authorities.

Other universities have to make provision, either themselves or through the student union for escort services to get students back to lodgings in safety. That may even involve providing a bus service. This does not suggest a happy situation although it demonstrates that universities act responsibly and try to deal with matters within their direct control. But it must be a matter of regret that security costs more and more and so comes into competition with funds that should be devoted to academic matters. Certainly the managerial problems of universities do not get any easier.

Student unions play their part. They issue an extremely good document in conjunction with the Chartered Institute for Environmental Health that provides very good advice to students who move into private houses or flats. The document discusses all the relevant problem areas that are important to the very large number of students who have to make their own housing arrangements independently of universities. I do not know whether general arrangements are made for the distribution of that document. I suspect that it varies from university to university. But I believe that any university where students are obliged to live in private rented accommodation would be well advised to undertake the distribution of that document to all new undergraduates when they finally accept their places and before they arrive at the university.

We all know that houses in multiple occupation are subject to a regulatory system and that various local authority bodies and others must deal with that matter. However, as the noble Lord, Lord Prys-Davies, said, the service is variable. It is quite clear that if universities keep a register of approved accommodation and enter into schemes like those at Lancaster and Leeds that the noble Lord, Lord Tope, outlined, the number of situations in which university students have problems will probably reduce.

It is a depressing fact of life that it is probably only a matter of time before one university or another is sued for damages by someone with a perception that the university has been negligent in some way about some aspect of the subject under discussion. That is not a happy situation. But the advent of conditional fees must make it likely. I received that opinion from a university secretary. I should like to hope that the opinion of such a senior administrator in a university might be wrong but I am afraid that time is on his side.

Universities nowadays are free standing, independent corporations, properly responsible for the management of their own affairs. They are, however, dependent on the public purse for a large part of their finances. I look forward to hearing from the Minister that the Government have in mind to use their strong position vis-à-vis finances to persuade universities to take the necessary action, which they are able to do if they have the will, to give proper protection to the students they take in as undergraduates.

9.21 p.m.

My Lords, I am grateful to the noble Lord, Lord Tope, for raising this important subject today. I should like to reassure the House that the Government very much share the concerns that have been expressed about the safety of university students who rent accommodation. We are firmly committed to ensuring that student accommodation is safe and provides reasonable living conditions.

The noble Lord, Lord Dixon-Smith, referred to liabilities for universities with regard to any action. I am sure the noble Lord will understand that on a matter to do with the law I prefer to write to him; and promise to do so.

Students can be particularly vulnerable, as many noble Lords, including the noble Lord, Lord Tope, have said. They are often living away from home for the first time and may not appreciate potential sources of danger in their accommodation. I stress that we are not prepared to tolerate their exploitation by unscrupulous landlords.

There have been too many tragedies which could and should have been prevented. I recognise and pay tribute, as did the noble Lord, Lord Dixon-Smith, and others, to the efforts of the National Union of Students to increase awareness of those dangers. But in addition we need to tackle the problem at source by minimising those dangers as far as we can.

Existing measures under housing and health and safety legislation have generally proved to be effective in reducing risks to people in rented accommodation. But we are aware of some shortcomings, including those mentioned by noble Lords today. I shall try to respond in detail to the points raised.

The noble Lord, Lord Tope, and the noble Baroness, Lady Sharp of Guildford, referred to the general problems of damp, infestation and structural problems. Local authorities have powers to deal with those problems under existing legislation—for example, Section 604 of the Housing Act 1985. That applies to any houses.

The Government are committed to introducing a licensing system for houses in multiple occupation (HMOs) because they play an important part in providing student accommodation. Our aim is to ensure that HMOs are safe and provide acceptable basic living conditions. We intend to issue a consultation paper on proposals for HMO licensing in England and Wales in the early part of this year. We want a new system which avoids the ambiguities—a point mentioned by noble Lords—and enforcement difficulties associated with existing controls. Our objective is to improve standards in HMOs through a comprehensive fair and effective scheme. My noble friend Lord Prys-Davies asked for further guidance to be issued on the definition of HMOs. We cannot use guidance to extend the definition. It is clear that what is needed is action beyond that.

We are aware of difficulties with the definition of HMO in England and Wales, particularly in relation to shared houses of the type occupied by students. We intend to adopt a more precise definition. One option would be to use the definition based on that currently used in Scotland. That would apply to all houses shared by members of more than two families. The vast majority shared by students would therefore be covered by this definition.

In response to the noble Lord, Lord Tope, I point out that primary legislation will be required to introduce this scheme and that the Government will legislate as soon as an opportunity becomes available. In the meantime, local authorities already have wide-ranging powers to ensure acceptable standards for HMOs. In England and Wales, they have discretion to introduce HMO registration schemes which require landlords to register properties with the authority. Schemes may include the power to refuse or revoke registration if acceptable standards are not met. However, as I have indicated, we recognise the problem that local authorities are cautious because of the difficulty with the definition.

The noble Lords, Lord Tope and Lord Dixon-Smith, referred to the fact that the worst housing conditions are often found in this part of the private rented sector. Poor fire and other health and safety standards are all too common, together with overcrowding and inadequate facilities. We are determined to protect the most vulnerable sections of the community from exploitation by unscrupulous or uncaring landlords. Our aim is to ensure that properties in multiple occupation are safe and provide acceptable basic living conditions. We want the system to be comprehensive and effective. At the same time, we recognise the need to ensure that unnecessary burdens are not placed on HMO landlords. HMOs play an important role in providing housing for groups of people, including students, who may have difficulty in finding alternative accommodation.

In response to the point articulately stressed by the noble Baroness, Lady Sharp of Guildford, about greedy and lazy landlords, our aim is to ensure that we improve standards in HMOs rather than close them down. The discretionary nature of the powers has led to inconsistent enforcement, with some local authorities taking a more proactive role than others, depending on local policy. That is why we are keen to introduce a comprehensive licensing system. That issue was raised by the noble Lord, Lord Tope, and by my noble friend Lord Prys-Davies.

The noble Baroness, Lady Sharp of Guildford, asked about deposits. We are concerned about the problems tenants face in getting their deposits returned. We are quite clear that they should not lose part or all of their deposit at the end of the tenancy and they deserve a proper explanation if that is happening. We are proposing a voluntary self-financing scheme to ensure that tenants' deposits are safely held. If, following meetings with representatives, the voluntary scheme is unsuccessful, we have made it clear that we will consider legislating to set up a system which ensures and enforces it.

A similar point was raised by my noble friend Lord Prys-Davies. Many noble Lords speaking in the debate mentioned the question of gas safety. Gas safety law requires landlords, including HMO landlords, to maintain gas appliances, flues and pipework in a safe condition: to arrange annual safety checks of appliances and flues using an installer registered with the Council for Registered Gas Installers (CORGI) and to provide records of those checks to tenants. The regulations apply to most rented domestic premises, including those occupied by students. Those regulations are enforced by Health and Safety Executive inspectors who work closely with local authority environmental health officers who have enforcement responsibility for other housing legislation, particularly with respect to HMOs.

As the noble Lord, Lord Tope, said, it is a critically important area. I am pleased to say that the Health and Safety Executive is currently conducting a comprehensive review of gas safety. That will consider, among other issues, the relative roles of health and safety and other legislation. It will also consider alternative enforcement strategies and bodies. The review's recommendations should be available by the end of the year. The HSE recently launched gas safety web pages on the Internet, which provide information to students on the law, their landlord's duties and what action they can take if their landlord does: not provide them with a copy of the relevant safety check. To focus the landlord duties further, the HSE: published a new leaflet. Copies have already been distributed in large numbers by university accommodation officers to landlords renting accommodation to students and, of course, to students themselves.

In response to the noble Lord, Lord Tope, in terms of health advice, twice in the past three years the Government's Chief Medical Officer wrote to all GPs alerting them to the symptoms of carbon monoxide poisoning. That advice reminded GPs to be even more diligent when examining patients during the winter months when carbon monoxide poisoning may be diagnosed as flu or other winter illnesses. Each winter all GP surgeries receive copies of the latest government publicity on carbon monoxide poisoning for the information of doctors and their patients.

The question raised by the noble Lord, Lord Tope, implied that he was arguing for licensing of all private rented housing. At present the Government are not proposing wholesale licensing in the private rented sector. However, we are concerned about poor standards at the bottom end of the market. If standards are not improved over time through existing voluntary arrangements, the Government will consider taking action.

I was asked a question by the noble Baroness, Lady Maddock, regarding non-fire safety approved furniture. Foam-filled furniture legislation applies to the supply of such furniture when letting property for business, enforced by trading standards. However, we acknowledge that there is a real difficulty with enforcement. Houses in multiple occupation schemes may enable local authorities to deal with the problem and licensing will definitely do so.

My noble friend Lord Prys-Davies, with the particularly detailed knowledge he has from his valuable connection with Swansea University, and other noble Lords paid tribute to the Lancaster and Teesside schemes. It is extremely important that we recognise the work being done on a voluntary basis at this stage and pay tribute to that. It is important with regard to the specific issue of HMOs that the appropriate action is taken following the proper consultation.

The noble Lord, Lord Dixon-Smith, referred to the wider issue of campus security and the problems that universities face. As I have said, I am not prepared on the hoof to impersonate a lawyer, as it were, but I shall write to the noble Lord. However, I recognise the concerns that have been expressed about the need for all young people to be protected in terms of safety. Few people realise that those in our society who are most vulnerable to physical attack are not little older women, like me, but young men. Universities have to work hard to ensure that all students, not only female students, are protected.

I hope that I have covered the points raised. I reiterate my thanks to the noble Lord, Lord Tope, for his courtesy in providing me in advance with information about his specific areas of concern. I hope that noble Lords are reassured that the Government take these issues very seriously, as demonstrated by our intention to consult on the HMO licensing scheme and the review of gas safety legislation. If, on reading Hansard, I find that I have failed to reply to any specific point, I shall, of course, write to noble Lords.

House adjourned at twenty-five minutes before ten o'clock.