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9.21 pm
Mr. Kevin Barron (Rother Valley): Today's debate has exposed the shambles that the Government have made of their attempts to privatise parts of the national health service. Successive Secretaries of State have promised us newer, bigger and better hospitals; they have promised us faster and more efficient services; and they have assured us that the Conservatives have a gleaming vision for an invigorated, market-managed, private sector-controlled national health service. However, the words of the Tories--and of the Secretary of State today--have been shown for what they are: hollow, empty promises. An endless stream of broken promises has brought the Secretary of State to the House today with this Bill.
My hon. Friend the Member for Peckham (Ms Harman) detailed those broken promises: Norwich, Carlisle, Swindon, Durham and others have been waiting years for new hospital buildings. They have been promised by the Government but have been continually delayed. The Secretary of State for Health spoke at the Royal College of Physicians on Tuesday 21 November 1995, and I shall quote from part of his speech:
Perhaps the Secretary of State would like to reflect on his words at that conference--they describe exactly the shambles that he has created with the private finance initiative in the health service. When he used those words, he claimed that he was painting a picture of public sector capital planning, but he must see that they apply fully to the situation that he has brought before the House today.
The Secretary of State for Health and the hon. Member for Aylesbury (Mr. Lidington) quoted what I said at a conference of the Association of the British Pharmaceutical Industry earlier this year. I shall give hon. Members the benefit of the doubt because it is quite clear that the Central Office brief used only a small part of my speech in relation to what I said about PFI. I should like to put what I said at the conference in context. I said:
I then said--this is the section that was missed out in the Smith square brief:
The answer to that question is no, we cannot expect that to happen. That is what is behind it. The Government have forgotten that the private sector is not as unconnected from reality as they are. The private sector has realised what the Department has failed to acknowledge since the very first day that it set the internal market in train: that the so-called NHS reforms, and specifically the internal market, are incoherent, illthought out, ineffectively planned and incompetently implemented.
Today, the Secretary of State has placed before the House a Bill to revise those reforms, rewrite the past and reinterpret his role. That has been the most striking feature
of the Secretary of State's tenure at the Department. He has attempted to retell the story of the Conservative Government's fragmentation of our national health service, with himself as its saviour, although he fails to mention that he is trying to save the NHS from the Tory Government of whom he is a member.
The Bill is not about trying to make this discredited Government look good on health by claiming to care; it is about patching up another hole in the NHS framework that the Government have created. Because there is no guarantee within the national health service framework that it will be paid, the private sector will not bail out the Government in their failed PFI policy so, in a classic piece of double-think, the Government are bailing themselves out by guaranteeing the payments that it needs to survive. It is like someone jumping out of a crashing aeroplane to keep the plane aloft and save themselves from death.
At least the hon. Member for Worcester (Mr. Luff) had the courage to say what the Bill was about; the Secretary of State avoided doing so.
My hon. Friend the Member for Peckham rightly said that the Bill had not been thought out. The fundamental purpose is not, as the Secretary of State claimed, a minor revision of already followed practices. It is not a Bill to clear up an anomaly in law. Patching up another hole in the NHS framework means undermining many principles that the Government claim to be sacred. The Bill would fundamentally alter the basis on which the Department and the public purse take on liabilities. It would expose the public sector to as much as £5 billion of liabilities, which the Secretary of State would have no way of controlling.
The House has been asked to pass a Bill giving the private sector the right to charge the national health service as much as £5 billion for its services, safe in the knowledge that it could bankrupt NHS trusts and still get its money back.
Mr. Barron:
I am willing to give way on that point, because the Secretary of State said earlier that trusts can borrow without his consent. It is my contention that that is at the back of this.
The Secretary of State is asking the House to underwrite £5 billion of private sector contracts without any Minister having a say in what the contracts are for or what they contain. The Bill spends public money without public accountability. No Minister would have a right to control the mounting liabilities that the Bill might create. Ministers get no say in writing the contracts; they write the cheques only if those contracts go wrong.
That is not what the private finance initiative in the national health service was designed for. That is not what Ministers told the House and the country that the PFI would do. When the national health service executive wrote last year to pass on the ministerial diktats on PFI, it did not say to the trusts, "Spend as much money as you like; enter any crazy contract you wish; the Government do not need to know. We shall just bail you out if you make that decision." Instead, on 20 March 1995, the NHS executive said:
This Bill does exactly the opposite. It makes contracting in the NHS under the PFI totally gilt-edged and absolutely risk free.
The NHS guideline notes on the PFI were specific. They detailed, in a headline style, 20 ways in which to transfer risks. The notes said:
Some of the risks identified were:
The list goes on. If this Bill is passed, that list of possible risks will be transferred not to the private sector but to the Secretary of State.
How does the Minister who will make the winding up speech hope to reconcile the Bill's purpose with the Secretary of State's comments to the Royal College of Physicians in November last year, when he said:
Where is the responsibility if we say that the British taxpayer, without taking a part in the decision, can write off any liabilities that are entered into? There is none.
My hon. Friend the Member for Carlisle (Mr. Martlew) said that there is no risk, and he is absolutely right. In Carlisle, a hospital that was promised years ago has been slowed down by the PFI, and any risk that was to be taken by the private sector will now be written off. I must commend his speech. I also looked at the soccer results before I came back into the Chamber, and Rotherham United have beaten Carlisle 2-0 tonight. We will be going to Wembley on 14 April. Their team made it last year, so we are sharing in the success.
This Bill ends risk-bearing by private contractors. Their bills are guaranteed to be paid, no matter how badly they have designed, built, financed or operated the contracted duties. Trusts could be falling over people offering to contract with them. Conceivably, a contract could be presented to build a new facility for free, a few cost overruns could be dropped in and then the contract could be laid on the Secretary of State, who would pick up the tab.
Mr. Dorrell:
That is not true.
Mr. Barron:
That is true; the right hon. Gentleman did not explain any of that when he opened the debate. This Bill is nothing more than a charter for cowboys, who could use it to milk the British taxpayer through the NHS.
"Every part of the country has its own story of a new facility that has been promised and planned and then delayed, mangled and often cancelled. Too many NHS hospitals bear the scars of this haphazard process".
"We do not disagree with PFI--how could we? It was Labour who first thought of partnerships between the public and private sector. We argued that it would enhance investment because of the long-term inability of governments to maintain capital investment".
"But what the Conservatives are attempting is to replace capital investment with PFI. The Budget produced a 17 per cent. cut in the NHS capital programme. The Secretary of State believes that private finance will fill this gap. But, to do so, there needs to be--in one year--a massive 242 per cent. increase in private money poured into the NHS. Given the history of PFI in the Health Service, can we really expect that to happen?"
"A fundamental principle of the PFI is transfer of risk to the private sector."
12 Mar 1996 : Column 874
"In many cases, the private sector should be able cost-effectively to assume the entire responsibility for the first ten risks, while taking a substantial share of the rest."
"construction cost overruns; losses caused by late completion; costs of correcting defects; maintenance and repair costs; failed income generation schemes; failure to meet targets; losses through inefficiency and competition; higher than expected running costs; losses from unexpectedly low resale values."
"We seek a risk-bearing partnership with the private sector which allows a proper return to the successful partner, but expects the unsuccessful partner to carry his proper share of responsibility."
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