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Mr. Deputy Speaker: Order. Unless the CHC especially refers to the Bill, this sort of contribution is not
in order in the debate. It is fair enough to use the example of the hospital in the hon. Gentleman's constituency to elucidate the main elements of the Bill, but not just to record what the CHC said on a previous occasion about that development.
Mr. O'Brien: Mr. Deputy Speaker, I am drawing attention to the lack of confidence in the consultation procedure that we are advised must be undertaken. If the Secretary of State and the Minister read carefully the letter of 6 March from the chairman of the CHC, they will understand why, in view of what happened previously, people in the Wakefield area are suspicious of the proposals to build a new hospital under the PFI and to change the hospital trusts.
Unless the Minister can give assurances tonight about the issues that I have mentioned on behalf of my constituents and the people who depend on the services of Pinderfields general hospital, and allay their suspicions, we shall not have the confidence that one would expect when debating such a Bill.
Mr. Peter Luff (Worcester):
Mr. Deputy Speaker, I apologise to you and to the House for not being in the Chamber for the opening speeches; my parliamentary duties elsewhere, including attendance at a Delegated Legislation Committee, meant that I could not be here.
I am very anxious to speak in the debate because I regard the passage of the Bill as crucial to the interests of my constituents, in bringing about the construction of a new hospital in Worcester. If the hon. Member for Normanton (Mr. O'Brien), whose speech was more reasonable than those of some of his colleagues, really wants a new hospital to be built in his constituency soon, as he says, he should reconsider his voting intentions, because a vote for the reasoned amendment and against Second Reading would further delay the hospital's construction. I am anxious to avoid that in my case, and the hon. Gentleman should be anxious to avoid it in his constituency.
It is a shame that the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) marred a typically effective and detailed contribution by his extraordinary attack on my right hon. Friend the Secretary of State. To accuse my right hon. Friend of indolence and ignorance--I believe that those were the words that the hon. Gentleman used--is like accusing the hon. Member for Bolsover (Mr. Skinner) of being a member of new Labour, as it is just about as implausible. I am sorry that the hon. Gentleman marred his contribution by such comments.
I was also sorry to hear the speech of my hon. Friend the Member for Colchester, South and Maldon(Mr. Whittingdale) as, in his fine contribution, he said many of the things that I had been hoping to say in my speech. [Interruption.] I hear cries from the Opposition Benches that my hon. Friend was reading from a central office brief. I can let Opposition Members into a secret: I
have seen that brief and I know that my hon. Friend was not reading from it; he was making his own speech--for which I pay tribute to him.
The Bill is genuinely technical. It is effectively a one-clause Bill for each hon. Member. Clause 1 is for hon. Members from England and Wales; clause 2 is for hon. Members from Scotland; and clause 3 is for hon. Members from Northern Ireland. Each hon. Member regards the Bill with his or her own constituency in mind and sees it as a one-clause Bill. It is almost a two-phrase Bill. Clause 1 states that the Secretary of State
The last few words of that phrase,
go to the heart of our consideration of the Bill; they also go to the heart of the future of the PFI in the national health service.
The notes to clauses, which were helpfully provided by the Department of Health, clearly state what the Bill is about. The notes state:
The next paragraph of the notes is important:
If I understand the Bill correctly, it simply makes it clear that the taxpayer stands, as he or she should, firmly behind all the liabilities of the national health service. To that extent, the Bill should not attract any controversy in the House this evening. What it means in practical terms is tremendously important. It provides the reassurance that is crucial to all those who trade with the NHS, from the smallest retailer--the provider of the odd bit of stationery or greengrocery--to the largest PFI contractor. There will always be someone who is prepared to honour the NHS's side of the contract.
Does it matter whether we pass the Bill? After all, the notes on clauses state that, in practice, all liabilities have so far been transferred elsewhere on dissolution and it is most unlikely that the Secretary of State will do anything different in future. But the Bill matters fundamentally to the future of the PFI, because those who stand behind the PFI contractors--those who will undertake the financing of projects--attach huge importance to the provision. Therefore, it must matter to every hon. Member who cares about the future of the NHS and who shares the vision, which I thought was common across the House, of the need to develop a more effective partnership between the public and private sectors.
What the PFI does--and will be able to do only if the Bill secures its passage--is to provide more capital than would otherwise have been available for the NHS. We can play word games about whether that money is additional to the overall levels of funding, but, ultimately, the Bill will enable an overall increase in the capital schemes in the NHS.
About 25 large-scale NHS/PFI schemes have recently been advertised in the Official Journal of the European Communities--all the schemes are worth more than£25 million. I am afraid that I have not done the arithmetic in my head, but the resulting sum of money is clearly large. I am glad to say that one of the schemes that has been advertised in the journal is for the new Worcester district general hospital.
If only half those 25 schemes were to succeed and come to fruition, that would still represent a huge increase in the capital programme of the NHS. That capital programme is significantly higher now than it was when the Government came to power. There has been a huge increase in the capital programme of the NHS, plus massive increases in current expenditure on it--there have been massive real terms increases. I think that I am right in saying that there has been an increase from about4.7 per cent. of gross domestic product in 1979 to more than 6 per cent. now. The capital programme could be threatened if the Bill did not secure its passage.
The working of the PFI depends on the substantial transfer of risk to the private sector. What sort of risks? The obvious risks are in design and construction, and in the costs associated with the commissioning of any new facility. There are also risks involved in the costs of operating that facility; there is a risk that, during the facility's lifetime, technological obsolescence may occur. All those risks need to be transferred to the private sector as part of the PFI, but the Bill deals with one risk that need not be--and should not and could not be expected to be--transferred to the private sector. If I have understood it correctly, that risk is that the Secretary of State might rob a trust of its hospital and leave all the liabilities behind. That risk would clearly worry any reasonable-minded financier or lawyer.
The Bill is important; an article in today's edition of the Financial Times states:
I do not know to what extent it is an emergency Bill, but I agree with the first half of that: PFI hopes do hinge on the Bill. I shall be fair and even-handed; the article states that while some
The article quotes Mr. Manning as saying:
It is as simple as that: the Bill simply puts the Department of Health in line with the other Departments of State that use the PFI.
The PFI does not seek to privatise the health service. Opposition Members' attitude to the Bill and the PFI is confusing. I sometimes hear them claim that they invented the PFI and I sometimes hear them seek to undermine it--often on the same day, to different audiences. On28 November last year, the Leader of the Opposition, the right hon. Member for Sedgefield (Mr. Blair), said from the Dispatch Box:
The right hon. Gentleman should let his vote follow his voice and support the Bill this evening--it is crucial to the future of the PFI.
At a conference in London in May last year, the right hon. Member for Kingston upon Hull, East (Mr. Prescott), the deputy leader of the Labour party, said:
However, only four or five weeks later, the right hon. Member for Derby, South (Mrs. Beckett) said from the Dispatch Box:
Labour Members must make up their minds--and, with respect, they should decide to support the Bill, which will genuinely enhance the future prospects of the PFI. On18 January, the hon. Member for Rother Valley(Mr. Barron) said:
Perhaps he should have listened to the remarks of his hon. Friend the Member for Peckham (Ms Harman) only five days earlier at a conference in Birmingham, when she said:
Labour Members seem to be saying two things but doing only one of them--that seems to sum up their position with regard to the Bill and the PFI.
The Bill is an essential underpinning of the PFI, which is the pragmatic way of introducing partnership into the national health service. The debate so far has focused too much on the issue of cost. Of course cost matters, but the hon. Member for Southwark and Bermondsey(Mr. Hughes) seemed to believe that the issue is only about cost. It is not. The benefits include additional capital funding, which will mean more projects overall and better cost control--so there is an element of discipline related to cost. The PFI will reduce the risk for the taxpayer and make better use of existing assets, as the hon. Member for Normanton said. I am sure that some imaginative ideas will come forward as part of the PFI bidding process in the health sector, about how to use the residual assets of NHS trusts.
My constituency case involves three sites, and I believe that the involvement of the private sector will assist us to make good use of them. The private sector will bring a more constructive and entrepreneurial approach to the issue, rather than the old, staid public sector approach. The PFI will shorten construction times by introducing innovations in the way in which hospitals are built.That will bring real benefits. We have seen how, in the Prison Service, private contractors can build more quickly than builders were able to under the old public sector contracts.
There will be innovation in its fullest sense. I have hinted already at innovation in the construction process and at making better use of existing assets. There will be innovation also in service provision. Those benefits could be jeopardised if the Bill did not receive a Second Reading, because the flow of PFI finance to big projects would dry up immediately.
Much of what I have heard in the debate leads me to believe that Labour Members have reverted to type--to old Labour--in opposing the Bill. The hon. Member for Normanton referred to "private moneylenders"--which is a particularly graphic and vengeful phrase. That old hostility has come through the debate with stark and startling clarity.
The fact that innovation will be put at risk if the Bill does not receive a Second Reading is best illustrated by what is occurring in South Worcestershire. The South Worcestershire community NHS trust has co-operated with a local fitness centre to provide a £250,000 scheme that will benefit the whole community and provide new services and revenue to the trust. My right hon. Friend the Secretary of State visited the facility on Friday last week, and he was deeply impressed by what he saw. If we do not pass the Bill, that scheme--which it is hoped will be replicated throughout the trust area--will face unnecessary difficulties and uncertainty in the future.
The trust has teamed with a health and fitness company to build a new exercise and fitness studio on the hospital site. The company, One-on-One, is working in partnership with the Evesham community hospital to help meet "The Health of the Nation" fitness targets. A press release issued last year states:
that is the Vale of Evesham--
"must exercise his statutory powers to transfer property, rights and liabilities of the body so as to secure that all of its liabilities are dealt with."
"so as to secure that all of its liabilities are dealt with",
"The policy objective is to ensure that, if a NHS trust is dissolved or a health authority or special health authority abolished, its liabilities are transferred to another specified NHS body, or the Secretary of State. This is to ensure there are no residual liabilities left outstanding. The objective is to assure those who contract with such NHS bodies that liabilities will not be extinguished in the event of a NHS trust, health authority or special health authority ceasing to exist."
"To date all liabilities of trusts have been transferred elsewhere on dissolution, and even without this legislation it is most unlikely that the Secretary of State would not do so in future. This change, however, removes all doubt on the matter."
"PFI hopes hinge on emergency bill".
"analysts are not yet convinced of the long-term viability of PFI in the health sector, most seem to accept Mr. Dorrell's assurances on the bill. Mr. Kingsley Manning, managing director of Newchurch and Co, a consulting firm involved in several health PFI projects, said that the risk transfer in PFI was never meant to refer to trust liabilities."
"The risks that the government is attempting to transfer through PFI are those that the private sector operators would be expected to have some control over, like volume, activity and performance . . . The new legislation just puts health in line with other government departments."
"The PFI is right in principle. We have supported it, and in many ways we have been advocating it."--[Official Report, 28 November 1995; Vol. 267, c. 1077.]
12 Mar 1996 : Column 852
"I have long been associated with arguing for public-private partnerships . . . I made the case for private sector involvement in public investment."
"there is growing alarm at the way . . . in which the Government openly use the private finance initiative to privatise core . . . services."--[Official Report, 3 July 1995; Vol. 263, c. 23.]
"We do not disagree with the PFI, how could we? It was Labour who first thought of partnerships between the public and private sector".
"I don't call it a Private Finance Initiative, I call it a privatisation initiative."
"Seven-and-a-half thousand square feet of brand new exercise and fitness studios with the very latest equipment will be ready for use in the autumn . . . But it's the alliance with the hospital that makes the health-promoting difference. Hospital patients will have access to new facilities and the award-winning 'One-on-One' team--they've gained a coveted British Standards/ISO 9002 Award for Quality--will be working as part of a wider NHS team to help persuade people across the Vale"--
"to become more physically active".
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