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There is no ring-fenced grant for community care for local authorities. Any money that is provided for community care will disappear in revenue support grant.

There are two critical problems, the first of which has been mentioned by the president of the Association of Directors of Social Services, John Rea Price. He asked, "What will happen to my authority?". His authority is Islington, which receives no revenue support grant. In other words, there is no grant for the money to disappear into. There are not many such authorities in Britain, but they are almost all inner-city areas with massive social problems. Their populations all need community care. It would be ludicrous if they were to have the liabilities under the Bill but, thanks to the funding arrangements, not a penny in grant to meet them.

The second problem is that already the revenue support grant bears no relation to the revenue that it is supposed to support. One Conservative Member referred to overspending authorities as Labour authorities. I must tell him that nine of the 11 authorities in England and Wales are overspending under the official definition, whether Labour or Conservative. In those circumstances, any additional money provided through the revenue support grant will be barely noticeable against the growing gap between the grant received and the services that authorities are supposed to maintain. We know that the Secretary of State knows that. We know that he understands full well just how stretched on the rack those local authorities are. We know that he understands how difficult it will be for them to shape up to the new responsibilities without new resources. We know all that because the obligation in the Bill is limited to an obligation to assess people for the community care service ; it is not an obligation to deliver that service once there has been an assessment. As the National Council for Voluntary Organisations observed :

"Assessment without action, or a place on a waiting list is of little value to someone in need of care and support."

We also know what will happen when those waiting lists for community care services develop. From the Secretary of State's past performance, we can predict that the moment that those waiting lists of people who have been assessed but for whom there are no resources available appear, the Secretary of State will put the blame on poor management by directors of social services.

I shall conclude by trying to seek the common ground, desperate though that search is. On one point I will commend the Secretary of State ; on one point I will pay tribute to him in recognition of what he has done this day. The Bill that he has presented to the House is, without question, the most fundamental change to the National Health Service in its 40 years. The Bill will change a public service into a business enterprise, in which the motivation will no longer be which treatment is most needed by the patient, but which treatment yields the highest mark-up for the hospital. It will change an integrated service of primary care, hospital care and community service into a fragmented service in which the new relationship between the divided units no longer will be co-operation with one another but competition against one another. It will change a service in which the objective is to give the patients the treatment they need at the hospitals of their choice into one in which they get the treatment for which their health authority has taken out a contract or which their general practitioners can afford at the hospitals that offer it most cheaply.

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I do not deny that the Secretary of State has the power to do these things. I am confident that the Whips will deliver a majority on Monday evening and give him a Bill that gives him even more power. However, I deny that he has the mandate to use those powers for a Bill so unpopular that its passage through this House will be as much an affront to democracy as a threat to the NHS.

The Secretary of State tonight spoke for the Conservative party ; he did not speak for a Government who represent the people of this country. In this debate, it is the Opposition who speak for the people outside. At the end of the debate, we will vote the way they would vote if they were admitted to this Chamber--we will vote to throw out this prescription for a commercialised Health Service. 6.14 pm

Sir George Young (Ealing, Acton) : Listening to the phrases used by my right hon. and learned Friend the Secretary of State to describe the reforms in the Bill, I thought that they seemed

familiar--promoting competition and choice ; making the system more responsive to the consumer and less dominated by producer interests ; pushing decision-making down the management tier ; and promoting efficiency. In fact, those were the phrases used in the Education Reform Act.

The parallels between reforms in this Bill and those in the Education Reform Act are striking, and hon. Members on both sides of the House could learn much by considering them in tandem. For example, the proposals for grant-maintained schools are replicated by those for self-governing hospitals, giving a measure of independence and local autonomy within the state-funded sector. Those for local management of schools are replicated by those for general practitioners to become fund holders, allocating resources as closely as possible to the point of consumption. The proposals for open enrolment and funds following the pupil are paralleled by those that facilitate switching one's GP and greater reliance on capitation, so rewarding popular provision and making the system more responsive to the consumer. National curriculum and assessment are paralleled by the proposals for medical audit to try to measure output and value for money, to raise standards and to determine where improvements might be made.

The philosophy behind the Bill is not new ; it is wholly consistent with a similar reform to another part of the welfare state, with high political stakes, that touches most of our lives. I draw much comfort from that parallel, and also the opportunity to learn some lessons. I remember when the education reforms were launched, before the last election. I do not doubt that, initially, they were a political minus. They were not popular on the doorstep. At that time we were told that it was wrong to apply the sort of concepts that I have described to state education. There was dismay at the violent reaction from the producer interests--principally the National Union of Teachers. There was a confused response from the Government to some fairly basic questions, giving the impression that the proposals had not been thought through.

Two years ago, Conservative Members spent a great deal of time explaining what was going on to school governors, parent-teacher associations and parents. Much of the time was spent fighting fiction and we also had to listen to the Opposition making the same sort of speeches

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as the one that we have just heard from the hon. Member for Livingston (Mr. Cook). I do not expect Opposition Members to agree, but I believe that those educational reforms are now a political plus. There are still difficulties, to which I shall refer in a moment and from which we must learn, but the debate matured, the argument developed and it was won.

The new language, the new ideas, have taken root. Concepts that were derided three years ago are now quite popular. I speak not as a Conservative Member of Parliament but as a parent and school governor in saying that concepts such as national curriculum and assessment, local management of schools, open enrolment and grant-maintained schools are popular and accepted.

The conclusion that I draw from that parallel, which is relevant to today's debate, is that people do not rule out radical change to the welfare state, provided that the basic principles are left untouched--free at the point of use, available to all, funded out of progressive taxation. Indeed, there is much evidence that there is an appetite for change once it has been properly explained, and a warm welcome for it when it is implemented.

Mr. Matthew Taylor rose --

Sir George Young : I am prepared to give way only once, in an attempt to reduce the average length of speeches.

Mr. Taylor : I am grateful to the hon. Gentleman for making me his No. 1 choice. The hon. Gentleman has drawn a number of parallels between this Bill and the Education Reform Act. He suggested that, provided it was set out within the right framework, radical reform was acceptable. One of the differences between opting out of schools and the proposals for hospital trusts is that there is no intention to provide any process of consultation with the users in the way that there is with parents in schools. How does the hon. Gentleman feel about that?

Sir George Young : The users of a school are relatively easy to define, but the users of a hospital are not. That is an easy point with which to deal. I have now provided the one opportunity for Opposition Members to intervene.

There are lessons to be learned from the debate. First, changes must be adequately resourced. Secondly, the time scale needs to be realistic. Thirdly--and crucially--high staff morale is essential if the benefits are to be secured. In the same way that we cannot achieve our educational objectives without teachers, so we cannot achieve our health objectives without the enthusiastic commitment of NHS doctors and staff.

It is all very well Conservative Members of Parliament declaring themselves content with the philosophy of the Bill, but what will happen on the ground to convince the voters that we are right? I shall look briefly at the impact of our reforms at primary care level and assess the medical and public response. I choose primary care for a number of reasons. First, the units--basically, general practitioner practices--are far smaller than the other units in the NHS--basically, hospitals. Therefore, it is easier for them to respond than it is for an organisation that is, inevitably, more bureaucratic. Secondly, the units are run by independent contractors and are more likely to display an entrepreneurial flair. Thirdly, what happens in a GP practice is loosely defined. In my view, general practice is what is done by general practitioners. Therefore, it is easier

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for them to respond pragmatically to changing consumer demand and raised expectations than it is for other parts of the NHS, where contracts may be more rigidly defined.

Politically, what happens at GP level is crucial, because for most of us this is the only experience of the NHS. Every year, two thirds of us visit a GP, and the average constituent goes to the GP four times a year. Nine tenths of consultations go no further than the GP practice, so it is here rather than at hospital level that we shall be judged. The hon. Member for Livingston was a little misguided in spending nearly all his time on the hospital service and saying almost nothing about the GP service.

The combination of advertising, leading to raised expectations the changed capitation arrangements and the facilitation of switching will have the most dramatic effect on primary care that the NHS has ever seen. I speak as someone who represents an urban seat, with many practices within the reach of most constituents. I recognise that the position will be different in the rural areas. In a nutshell, what will happen is that market forces will work. There will be competition and choice, and this will push up standards.

For example, it may become known at one medical centre there is a creche where parents can park their children while they have a consultation--if not every day then perhaps on some days. The word will get around that that practice offers that service. Another practice may be offering minor operations at the centre, dealing on the spot with cysts, verrucas and warts. Others may have negotiated special deals with local keep-fit centres and health clubs, perhaps with discounts for their patients. Others will have clinics for those with particular needs such as arthritis and diabetes, or slimming groups. We could see more chiropody and counselling at GP level. A variety of services will be developed, making it less necessary to visit hospitals.

Mr. Nicholas Winterton : Will the my hon. Friend give way?

Sir George Young : I shall give way to my hon. Friend when I have finished this point, but that will be the last time that I shall give way.

It is not unthinkable that, in some of the larger practices, they will take X-rays, saving patients the bother of going to hospital. After all, that has now become routine at the dentist. There may be other services that no one practice can provide on its own, but that collectively, a number of practices can provide to improve the quality of care. There will be enormous pressure to improve premises, to the benefit of the patient, and to improve what one might call customer relations, such as more helpful receptionists and less queueing.

Mr. Winterton : My hon. Friend is implying that these facilities and activities are not already provided by the large majority of practices. Will he comment on that, and also on the fact that the guru who advised the Government on the changes, Professor Alain Enthoven, has expressed deep concern that fund-holding practices cannot properly or even effectively operate on a practice of only 11, 000 patients?

Sir George Young : The very next sentence in my notes says that some of this exists already. However, what does

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not exist is the pressure to improve. There is little awareness of what is available in the more progressive practices. Expectations of what one should get from a GP are low. The Bill's provisions will result in more choice, more competition, more variety and an incentive to improve that does not exist at the moment. Some GPs will decide that this is not for them, but others will seize the opportunities available and dramatically improve services. In two years' time, as we approach the election, people will be confronted by different rhetoric from the two sides of the House. We shall be talking in terms of billions of pounds spent--something that people seem reluctant to believe, and have difficulty in understanding. The Opposition will be full of their usual doom and gloom. I shall ask my constituents to judge for themselves, by their own experience of what has happened.

For that to be a successful test, we must learn from education. We need to examine resources, timing and morale. On resources, as we move over from a system where the producer is king to one where the consumer is king, there will be even more pressure for more resources. If the money is to follow the patient, the patient must have a full wallet. Otherwise, the patients will become impatient. The new system will quickly identify where supply is failing to meet demand. For our philosophy to succeed, there must be adequate funds. What terrifies most of the GPs to whom I have spoken is timing. They are not all hostile to the concepts in the Bill, but the data that they need to give to the family practitioner committee and the district health authority are not data that they have at the moment. Nor do they have the information technology to identify, that data. I ask the Government to look again at some of the time scales to see whether we are not trying to do too much too quickly.

The third factor is morale. To achieve the higher standards of health care that we all want to see, we need an NHS in which the staff feel appreciated and are well motivated. We must do even more to win over their hearts and minds and show all of them that what they do commands our respect and appreciation. At the end of the day, they deliver health care, not us

In the time available, I have not touched on much of the Bill, and in particular have not mentioned community care. However, I hope that I have said enough to show that I have faith in the reforms and that I look forward with confidence to their introduction.

6.26 pm

Mr. Michael Foot (Blaenau Gwent) : The hon. Member for Ealing, Acton (Sir G. Young) has already referred to the crucial aspect of the debate-- the feeling of those who will have to operate the service. Before talking about that, I shall make two brief personal references. I am the only Member who was here in 1948, when the original Bill went through the House. Even more appositely, I have recent experience of the NHS. I had two operations done at once. When I went to another consultant in the same hospital, rather boasting about this achievement and thinking that I had got it purely on medical advice, the consultant who was dealing with a different part of my anatomy said, "At any rate, that will have saved the NHS some money." I am glad that I have done so, as I am interested in how much money the service gets.

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I thought that the Secretary of State would have come here with a little humility after all these weeks and months of debate. I thought that he would have listened a little to what has been said by people outside this place. I was staggered when he quoted only one sentence from the document presented to the Government a week ago by the bodies representing all the people who work in the NHS. They include not only the unions, whom the right hon. and learned Gentleman is so eager to deride at every opportunity, but the nurses, all the royal colleges and the British Medical Association. They all joined to make representations to the Government at the last moment, to try to put their case. The Secretary of State merely picked out one sentence, trying to suggest to those Tory Members who might be innocent enough to believe it that there had been some change in the attitude of those who will have to put into operation the proposals that the Government are seeking to force on them. There has been no change in the attitude of all those bodies, and that is not just due to propaganda.

I hope that everyone working in the NHS will listen to, or read, the speech made by my hon. Friend the Member for Livingston (Mr. Cook). I am sure that they will have great respect for what he has done, and the way he has put his case, ever since these proposals were introduced. He was never better than he was today. To surpass even his own previous performances took some doing, but he did it and he tore the Government's case to tatters.

Why do the Government not stop for a few minutes--the hon. Member for Ealing, Acton (Sir G. Young) had enough diffidence to do so--to ask themselves why their policies are so unpopular, why their proposals do not command any real support among the vast majority of people who know about the service, be they the doctors, the nurses, the patients or anyone else involved in the service? Why have the Government been unable to persuade them? Do they not have the humility to wonder whether there might just be some defect in their proposals which has led to that extraordinary situation?

The Secretary of State was appointed to his job as the greatest of the communicators, but he must be the most misunderstood man of the century. Apparently, nobody knows what he has been saying. He has had plenty of opportunity and has spent huge sums of taxpayers' money to speak at the top of his voice, but still he is not believed. When I was in hospital the other day I did my best to defend the right hon. and learned Gentleman ; to see what his good qualities might be. I was asked whether I thought that he was all bad. I stopped for a moment and I did my best to think, as I am thinking now, what I could say in his favour. The best thing that I could think of is the fact that he is a supporter of Nottingham Forest, but if my friend Brian Clough managed Nottingham Forest in the way the Secretary of State has managed the NHS he would be reapplying for readmission to the fourth division.

The right hon. and learned Gentleman should have learned from his follies and mistakes. Right at the beginning he made an appalling mess of the nurses' regrading, which was carried out so inefficiently and insensitively that there are still many scars. As the right hon. and learned Gentleman said, huge sums of money were spent on the regrading process, yet far from in any way improving the atmosphere in the service, it has done the exact opposite. I checked last week, and even today in Wales, and no doubt in many other parts of the country, great soreness remains among vast numbers of nurses

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about the way in which the regrading was done and the way in which they were misused and misled. That is still creating grievance in the service.

One would have thought that the right hon. and learned Gentleman would think about that and consider some other way of going about his reforms, especially since the source of all the suspicion in Britain is the way in which the plans were originally devised.

When Aneurin Bevan set up the Health Service, he said that a way would be needed to inquire into the service every five or 10 years to see what improvements could be made and whether it could be enlarged, using the experiences that had gone before. He put forward such an argument on every Bill that he introduced. Of course he wanted to see such a process in the NHS. It was never dreamed then that the NHS would be kept on exactly the same lines as it was when it was first introduced.

The Labour party has never been against making changes in the NHS to make it greater, and I am sure that the next Labour Government will do exactly that. But the present Secretary of State and the Government began in the worst possible way, and that was the origin of the deep and justified suspicion about all their proposals--whether for general practice, for the NHS or for community care, on which the Government have consulted a bit more but not much more.

The Government did not consult at all. A committee presided over by the Prime Minister was charged to try to produce some proposals for the NHS which would satisfy the Prime Minister--the very worst way of going about it. The Secretary of State was not even on the committee. He chose to take on the job when the Prime Minister was showing greatest omniscience or omnipotence--whatever one likes to call it--when she thought that the Government had absolute power to do whatever they wanted. The Secretary of State is a clever fellow, but his ambition got the better of his political intelligence at that time. He took the job and now he is landed in it. Every time he gets up to speak he is even more unconvincing, and he has never been more unconvincing than he has been today.

Mr. David Nicholson : I am grateful to the right hon. Gentleman for giving way. It is always difficult to find a full stop in his remarks.

Will the right hon. Gentleman say whether it is still Labour policy to abolish competitive tendering in the NHS and whether the Labour party will continue the vendetta against private practice that the Government of which he was a member carried on? If so, how will that help the NHS?

Mr. Foot : There was no vendetta against private practice. The Labour Government carried out the measures that they said that they would carry out and introduced many measures for enlarging and protecting the NHS and some of its essential principles. I shall come in a moment to what should figure most prominently in a new Labour Government's plans for the NHS.

It is the origin of the Government's proposals that poisoned them right from the beginning. That is the reason for the strength of opinion throughout the country. The right hon. and learned Gentleman should have understood that. Do men gather grapes of thorns, or figs of thistles? No one could get good reform for the NHS out of a committee presided over by the Prime Minister, who was

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eager to discover some means--she did not want to use the word "privatise"--to twist the Health Service into something different. The Prime Minister has no need to worry when such charges are made against her. She is supposed to be a great conviction politician. Presumably, one of her convictions is that Socialism is wrong. Yet Socialism was embedded and entrenched in the NHS from the very first. The right hon. Lady says that she will kill Socialism in Britain, but she cannot do that without killing the NHS. To make a frontal attack would be too damaging, so the Government have carried their intentions through in a surreptitious way, which my hon. Friend the Member for Livingston (Mr. Cook) has exposed. But they will not succeed because they have not been able to carry any significant section of opinion with them. One of the principal reasons for the change in mood throughout the country, and one of the principal reasons for the Government's coming defeat, is what the Prime Minister has tried to do to the NHS. Most Conservative Members know the truth of that.

The question is how much damage the Government will be allowed to do in the meantime. Anyone who accuses the Labour party of using the arguments about the NHS for partisan purposes, should recall the offer made by my hon. Friend the Member for Livingston on behalf of the Labour party in May, before the Bill was introduced. From the point of view of political advantage, it was not an easy proposal, but from the point of view of protecting the Health Service, which we want to build up in a proper way when we get the chance, it was a good proposal.

My hon. Friend suggested that we should not go ahead with the Bill but should let the electorate decide what kind of Health Service they want. They did not have a chance to do that at the last general election because the Government's proposals were not before them. My hon. Friend suggested in May that the electorate should be allowed to decide at the next election. We shall indeed decide then, of course, but shall we be allowed to decide before all the changes and convulsions in the NHS are introduced, with all the damage that could be done? That would be much fairer. If the Government had any desire to protect the NHS they would have accepted that proposal. As I said, it would not necessarily be to the Labour party's political advantage, but it would have meant that the British people would have the fair choice of deciding whether they wanted the Labour party's proposals or the Government's proposals. If the Government had had any faith in their proposals, they would have accepted that proposition then. It is quite improper for anyone to suggest that the Labour party has used the great argument about the National Health Service for its own partisan purposes. We have been eager to protect the NHS and its future, because we believe that the service is the greatest domestic achievement of any Labour Government in modern times and we want to ensure that we have a chance to build it up properly. I am sure that my hon. Friend will be there to do that.

We shall want--among other things--to carry forward some of the reforms that were initiated in 1948. No one claimed then that the NHS had been founded on a democratic basis--indeed, the co-operation of doctors and other staff would never have been secured if that had been

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the case--and a national scheme had to be devised to take over many local government operations. Nevertheless, Aneurin Bevan and the others who introduced the scheme always argued that a much firmer democratic basis must be re-established in the NHS.

Mr. David Nicholson : More power for the trade unions.

Mr. Foot : Certainly it was thought that the new democratic system should be partly union based, in that those who worked in the service should have their say ; more important, however, it was felt that it should have a basis in local government. The Prime Minister and the Government hate local government almost as much as they seem to hate the trade unions, but they have been logically forced to return to it by the sheer need to do something about community care. Their scheme is still half-baked ; it is time for them to discuss it much more openly with local authorities, and to give those authorities the chance to make a full contribution that they never gave to those who work in the Health Service.

The National Health Service is one of the main issues on which the next election will be fought. I have no doubt that the country will make up its mind that it needs the Opposition's proposals for the protection of the existing service, and for its future. I congratulate my hon. Friend and his colleagues on the steadfastness with which they have put the case for the whole country, and on their refusal to be led astray by any of the diversions prepared by Conservative Members. They have made a great contribution to the welfare of the whole country.

6.43 pm

Sir Michael McNair-Wilson (Newbury) : I shall not follow the right hon. Member for Blaenau Gwent (Mr. Foot), except to say that it is clear from his speech that even an old Socialist will become inherently conservative as he grows older. The right hon. Gentleman's vision of 1945 is so perfect that, 40 years later, he believes that it cannot be improved upon ; yet he knows that he was part of a Government who reduced expenditure on the same National Health Service that he is now lauding to the House. He also knows that it is Government's responsibility to manage the affairs of this country as they think best at any given moment, and to accept the economic circumstances in which such services can be provided.

I do not criticise my right hon. and learned Friend the Secretary of State or the Government in any way for taking on themselves the task of looking at the NHS 40 years after its inception, or for asking whether its structures are as perfect as the right hon. Gentleman would have us believe or whether they can be greatly improved--not only to make the service better for those who work in it, not only to maximise its assets, but, most important of all, to ensure that the patients who are its customers benefit from the best treatment available.

Having said that, I must also say with some regret that the Bill, in my view, has missed a golden opportunity. Both the hon. Member for Livingston (Mr. Cook) and my right hon. and learned Friend talked about patients, but the Bill makes no reference to their rights ; I wish that it did.

The Health Service, as we all know, is available free at the point of use. It is about making people better--as many as we can, as often as we can and as effectively as we can, both economically and clinically. When, as sometimes

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happens, it fails to offers the service that we can reasonably expect, we are right to ask for explanations and apologies--and, I believe, for compensation for medical accidents without recourse to law. We, the patients, have entrusted ourselves body and soul to the medical staff to be made well : they have a duty to tell us what went wrong, and to compensate us if they have made a mistake.

I know that that is contentious, but I do not believe that we can continue much longer with the present compensation scheme, in which negligence is the sole reason for an offer of compensation. I am sorry that the Bill has done nothing to redress what I believe to be wrong, or to establish patients' rights more firmly--as firmly as they were spelt out in the patients' charter, that I drew up with the Association of Community Health Councils for England and Wales and presented to the then Secretary of State at the beginning of 1987. Because of my views on the need for the service to meet patients' requirements, I strongly support the concept of medical audit. That concept is inherent in the White Paper, whose intention was to raise standards generally. The Bill provides for the involvement of the Audit Commission, which will bring about a similar effect in a different way.

Audit can be clinical or managerial : it can be assessment of medical practice, or a check on how resources are being used. Either way, it measures performance, and that has been one of the shortcomings of the service hitherto. The structure that we intend to use for clinical audit, involving the royal colleges, will require many man hours of consultants' time if it is to be effective, and will thus be a costly exercise. Extra resources will be needed if it is to be done properly, and it must be done properly if it is to be of real value.

If we have audits, what sanctions will go with them? Will their findings receive a public airing, or will they be confidential? Will access to the findings of a clinical audit be restricted to the doctors involved? Can a health authority be censured for poor performance, and required to do something about it? That is what patients will want to know--or, at any rate, what their

representatives on the community health councils will want to know. Perhaps, at long last, medical audit will provide some yardsticks for clinical competence. If it achieves its aim in making a contemporary assessment of a doctor's ability, it may shed light on whether--as a result of the speed with which medicine is progressing--retraining should be part of the work experience of doctors.

Ever since the Secretary of State gave me an assurance earlier this year that no chronically sick person would ever go without the drugs that he or she required from a GP, I have found it difficult to be convinced by those who have spread scare stories suggesting that the effects of indicative drug budgets would be detrimental to patients. The national drugs bill is huge, but I do not doubt that most of it is wisely spent. However, we all know of doctors who prescribe six months' supplies of drugs, such as sleeping tablets, without ever considering whether the drugs are really needed or whether another course of treatment might be better for the patient. We know that 27 million tranquillisers are given out anually and that some doctors prescribe without a thought as to the price of the drug, or whether there is a cheaper generic substitute.

We all know that antibiotics given to cure an illness are thrown away before they are fully used up, simply because we are feeling better and have no further need of them. Patients seldom stop to think that they are throwing away

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public money. I do not think that it is unreasonable to ask the medical profession to have a care about what they prescribe ; it is being paid for out of public money. That should not inhibit their clinical judgment, and from what my right hon. and learned Friend the Secretary of State has said, it clearly will not do so. However, it should make them more conscious of value for money. That point will not be lost on the drugs industry, efficient though it is. I was grateful for the Secretary of State's answer to my question about hospital drug budgets. However, wonder drugs do not always receive the financing that they require. I personally am able to talk about a drug called erythropoetin, which is given to kidney patients who are receiving dialysis treatment. I am such a patient, and I can assure my right hon. and learned Friend that it is a wonder drug for kidney patients. It overcomes acute anaemia, it returns their haemoglobin to a normal level and it gives them back the energy that they lost when their kidneys failed. However, the hospital that is looking after me is funded for only half the number of kidney patients that could benefit from that drug.

I hope that the Department will examine again the possibility of finding sufficient money to fund a new drug when it comes on the market. It can, as in the case of erythropoetin, completely change someone's physical characteristics for the better. It is not good enough simply to say that the amount of money that can go into a hospital's drug budget is restricted and that the hospital must decide how to spend it. If we want to make progress with drugs research, we must provide the finance to make the wonder drugs available to the largest possible number of people.

I am concerned about an apparent overspend in West Berkshire health authority's drug budget during the first part of this year on acute cases. Taken together with other projected overspends, the authority will have to make reductions if it is to stay within its overall budget. Certain expenditure savings are possible without affecting patient care. However, in a letter to me, the chairman of the authority said :

"To a great extent the severity of the forthcoming winter will control the success of this exercise. Inevitably there will, in any event, be a reduction in elective surgery."

That suggests to me that the two general hospitals in Reading are working within too narrow financial restraints. Some of the £33 million that, it was recently announced, will be used to help to reduce waiting lists may come our way. The abolition of the Resource Allocation Working Group formula, which has kept the Oxford region under-funded for so long, will improve our cash flow.

Perhaps we shall not have a severe winter, or an epidemic, but there are inescapable grounds for concern in the case of all of us who may need to use those hospitals this winter. I wonder why, year after year, we never seem to get the funding quite right. After April 1991, with the introduction of contracts between health authorities and hospitals, under which the health authority purchases health care from a hospital, that position will change. The audit may show up management shortcomings and even places where either savings can be made or resources generated.

We shall always want to use our district hospitals whenever possible because of the benefit of local access and family support, but the Bill will result in health authorities having a new discretionary power to buy

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services that cannot be provided locally at an economical price and to use the hospital facilities of other district health authorities to meet the needs of patients living on their periphery, if that is more convenient for the patient. By the same token, district health authorities may well see the advantages in encouraging local hospitals to specialise and so attract external contracts. To revert to kidney patients. I think that it is possible that, as a result of the Bill and of the fact that the money will go with the patient, district health authorities which are currently sending their kidney patients for dialysis to hospitals that are often a very long way away from where they live, will treat those patients in the local hospital. They will set up small dialysis units, because they will have more money with which to create them. That is a positive example of the benefits that the Bill will provide for a particular group of patients whose needs are not met under the existing structure.

That is an example of one group of patients about whom I know quite a lot. Perhaps I ought to have declared an interest and said that I am the president of the National Federation of Kidney Patients Associations. The money will go with the patient and the district health authority will have sufficient finance to set up dialysis units, of whatever size is needed, for its own patients.

The introduction of block contracts will result in new financial incentives for the Health Service. It should create healthy competition and an effective internal market, in which hospitals will consider what they can do best to maximise their assets. There will be performance audits to improve clinical care and quality of service. Practice budgets will give groups of doctors a new freedom to get the best for their patients. Some self-governing hospitals will be able to take responsibility for their budgets and for the way in which they manage their facilities and set out their stall. The reforms will take time to shake down and to work effectively and efficiently. No doubt changes will be made as we learn from experience. That is how it is with all reforms. I end, however, as I started, by reminding the House that the changes brought about by the Bill will be a success only when patients say that they are successful. They are the customers of the health care provisions that we make. They will decide whether, after 40 years, we have crafted a National Health Service that, to quote the Prime Minister, is so good no one will want to go privately. I believe that the Bill is an important step in that direction. I wish it well.

Several Hon. Members rose --

Mr. Deputy Speaker (Mr. Harold Walker) : Order. It might be sensible if I were to remind the House that Mr. Speaker has decided that the 10- minute limit on the length of speeches should apply between 7 and 9 o'clock.

6.57 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye) : No hon. Member doubts what has been said by the hon. Member for Newbury (Sir M. McNair- Wilson) about his personal experiences, or the sincerity with which he speaks. It is always a pleasure to hear him speak in Health Service debates.

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The hon. Gentleman legitimately criticised certain aspects of the Bill. I agree with him. Not the least of those criticisms is the fact that patient rights are given little prominence. The Secretary of State said little about those rights today. However, I do not share the hon. Gentleman's optimism about other aspects of the Bill. It can be understood only in the context of Conservative party thinking on the subject. During the last decade, the Government have come to believe that they know the price of everything. The Bill is the apotheosis of that process. However, they have revealed that they know the value of nothing. Nowhere is that more clearly demonstrated than in their proposals for the National Health Service.

Throughout the last decade, the Government have been singularly unsuccessful in persuading the British public, in the Prime Minister's famous phrase, that the Health Service is safe in the Government's hands. Opinion poll after opinion poll throughout that period has demonstrated that they have not persuaded the British public to that view. Personal experience at community level has underscored that point. People have seen the distance widen between the rhetoric of Ministers at the Dispatch Box and on national platforms and the reality of what is happening to the NHS. They have witnessed forced cuts, ward closures and a general decline in morale among so many of the professionals within the NHS.

Perhaps it reached its most farcical climax under the present Secretary of State during the difficulties and the controversy, referred to by the right hon. Member for Blaenau Gwent (Mr. Foot), which surrounded the nursing profession in the summer of 1988. The Secretary of State disappeared out of the country and the service appeared to be rudderless. More time and money seemed to be spent by the press trying to track down the Secretary of State abroad than the police devoted to trying to locate Lord Lucan. The difference between Lord Lucan and the Secretary of State is that Lord Lucan got away with murder before he left the country, whereas the Secretary of State has been trying to get away with ministerial murder since he returned from that summer sojourn.

The proposals were made by the Prime Minister and handed to the right hon. and learned Gentleman by his hapless predecessor. This is a fundamentally bad Bill for Britain.

It is worth taking the Government at face value and considering the thrust of their approach. Their White Papers are called "Working for Patients" and "Caring for People". I echo the words of the hon. Member for Newbury (Sir M. McNair-Wilson) and ask to what extent the Bill enhances, strengthens and extends patients' rights within the Health Service. The conclusion has to be, emphatically, that it does not.

Hospital trusts, budgets and contracts and the language used by the Secretary of State in his opening speech are all designed to enhance competition through the diversion of financial resources, rather than through the extension of consumer choice.

I shall give two examples. The first is hospital trusts. Several of my hon. Friends have challenged the Secretary of State during the debate to say why, if patients are to be of paramount importance, there is no inbuilt mechanism for them to be consulted about the future of a hospital, when it makes a fundamental decision about opting out of the Health Service--or, if the Government do not like that expression, deciding on hospital trust status.

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Secondly, when we consider the new three- year contracts to be held by health authorities and GPs for care at a hospital which has put in a bid for a particular type of treatment, our main worry must be that the motivation for sending a patient in a particular direction will be financial rather than consultative or allowing the patient the right to choose the treatment and the most practicable hospital for it to be carried out.

The Government claim that patients will be all-important, but the truth is that, given the motivation behind the Bill and the mechanics involved in it, their position will be devalued.

On the principle of general practitioners' rights of referral, the Department of Health has said that they

"cannot be interpreted as a licence for GPs to disregard the contractual arrangements a presumption of the right to make an extra-contractual referral cannot be a guarantee that the DHA would in all cases meet the cost".

That is the proof of the pudding. Money is talking in all the decisions and the new mechanisms that are being set up. As many right hon. and hon. Members have already said, what is worse is that none of the available evidence shows that the Department has a clear conception of that.

Even more important is the fact that GPs, in order to make correct, informed decisions about a patient, will require a degree of information technology, recall facilities, and computer links within the National Health Service, which they simply do not have. Today I heard evidence from a number of hospitals, some of which are potential bidders for trust status in two years' time. They said that they need time to bring information technology facilities up to scratch to meet the provisions of the Bill if they are to achieve independent hospital trust status. The Bill will be £6 million a time. I think that the Select Committee has examined that and come up with evidence for it.

Where is the money to be found for the necessary upgrading of information technology to make a success of the scheme, and to enable the necessary take-up of the innovations proposed by the Secretary of State? I do not base my arguments on the grounds used by the Opposition, because we are opposed to their scheme, but on those laid down by the Government. It has not been costed properly. A consultant surgeon, James Appleyard, perceptively wrote :

"No responsible and ethical business would undertake such an untried venture without the full costs and appropriate information technology to ensure these are valid and up to date."

The best place to discover the possibilities of failure and abuse is in a letter to health authority chairmen and managers from the Department of Health, entitled "Pricing & openness on Contracts for health services" which states :

"Monopolists will have an incentive to restrict supply, to drive up price and either to inflate profits or costs. Buyers will be offered lower quantities at higher prices than would otherwise be the case information about quality and price is generally poor hence buyers are in a weak position to make meaningful price and quality comparisons and to shop around".

I do not like the terminology, but let the Department speak for itself :

"All of this suggests that we will not always be able to rely on actual competition, potential competition or bilateral monopoly to ensure that the NHS internal and external markets work effectively".

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