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Mr. Kevin Barron (Rother Valley): My hon. Friend the Member for Edinburgh, Leith (Mr. Chisholm) is absolutely right to talk about the issue of the private finance initiative and clinical services. I shall return to that matter on the Bill's Third Reading later today, if we get that far. We thought that we would get to Third Reading in the early hours of last Thursday, but the Government's Whips, unfortunately--for some inexplicable reason--decided to withdraw the Bill's remaining stages on that day. Nevertheless, we have come along today hoping to finish the Bill's Report stage and Third Reading.
5.15 pm
Hon. Members will know that my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Galbraith) is not only a well respected Member of Parliament, but a very well respected member of the medical profession. Many of us therefore believe that not only it is right for the House to listen carefully to what he says, that we should also give due recognition to what he thinks should be contained in health service legislation passing through the House. On that basis, I hope that the Minister will respond fully to the points that he made.
I should like to examine in turn each of the new clauses tabled by my hon. Friend the Member for Strathkelvin and Bearsden. New clause 2 is straightforward and logical. My reading of it is that it attempts to consider the Bill's real effects on public finances, which is something that Ministers should have considered and acted on during the Bill's passage. The Government have sprung on Parliament this Bill as a reaction to the need to get the PFI moving somewhere--whether in the city, the Treasury or wherever--or to promises of new hospitals. The Bill has, more or less, been an attempt to liven up the Government's PFI, and is not an attempt to find the best way in which to look after the interests of the public purse.
New clause 2 has two effects. First, it requires that the Secretary of State absorbs as few residual liabilities as practicable. Secondly, it states that the total that the Secretary of State transfers to himself, rather than to other health service bodies, should be limited to a maximum amount, specified by the Treasury. Those provisions are entirely sensible. I must say that I am still unconvinced, as are other Labour Members, that we would have proper scrutiny and statutory control of public expenditure in this sphere only if the amount reaches £5 billion. We find that that is unacceptable. The provisions of clause 2 alone are sufficient. I think that the Minister should seriously consider accepting it.
The clause makes a further provision that enhances its importance, requiring that Parliament approves the limit set by the Treasury on total allowable liabilities absorbed by the Secretary of State in any one year.
We have consistently argued that the PFI process is far too secretive. We have also argued that the Secretary of State is assuming so-called "powers" under this Bill that are not powers at all. He is merely gold-plating risk in the private sector--a risk which, he has told us on numerous occasions in different speeches, is a risk that the private and not the public sector should take. His "power" is merely the power effectively to write blank and undated cheques. Even if he is knowledgeable about the sum involved, Parliament is not so knowledgeable. The power is effectively to write out cheques on behalf of the public purse and to hand them to private sector companies through the PFI.
This new clause will limit the extent to which the public purse will be exposed to such blatant rigging of the PFI process, and Parliament will consider what should be the right amount of risk for the Secretary of State to guarantee. It is important that someone does so, because the Secretary of State is not required under this Bill to consider the amount of risk to which he may be exposing the taxpayer.
New clause 3, which was tabled by my hon. Friend the Member for Strathkelvin and Bearsden, further requires that the Secretary of State prepares a report to lay before Parliament detailing how much his gold-plating exercise will cost us. Currently, no one may ever find out how much has been spent on risk transfers to the public sector. No one may ever know how much public money is being siphoned off into the private sector at the expense of the NHS. My hon. Friend's new clause corrects that situation and brings back a degree of openness that is entirely lacking in the Secretary of State's dealings with the House on this Bill.
I believe that these clauses should be considered because, importantly, they bring some semblance of balance and responsibility back into the Bill. It is of some concern that Ministers did not consider the need of the House and the country to ensure that proposed legislation is fair and balanced and that we, as Members of Parliament and the protectors of taxpayers' money, have a say in how that money is spent.
Without these clauses, the Bill is diminished. Parliament will have no say in the way in which possibly billions of pounds may be expended. That expenditure, which ultimately taxpayers will have to pay for, may be virtually unlimited.
The Minister must be concerned about the possibilities raised by the Bill. What will happen when the £5 billion ceiling has been reached--the only statutory protection that exists currently? Will the Government be back for more, asking us to increase the target with as little consultation as we had in setting it in the first place? What will the Secretary of State say when Parliament asks what measures he took to limit public expenditure? What will he say when he is asked why he made no effort to monitor effectively the liabilities being incurred? These clauses would give Parliament such responsibilities. Since they appear to be too much for the Minister and his colleagues to handle, why not let Parliament assist in the process?
We believe that the unwarranted extension to the PFI system in the health service, which the Bill proposes, is flawed. There is no effective scrutiny or monitoring. There is no real accountability and there is certainly no openness. The clauses repair some of the damage that the Bill will inflict. Perhaps the Minister will recognise that
the Bill is unbalanced and irresponsible and that without provisions such as this it will remain so. I hope that the Minister will look favourably on the new clauses.
The Parliamentary Under-Secretary of State for Health (Mr. John Horam):
As the hon. Member for Rother Valley (Mr. Barron) reminded us, his hon. Friend the Member for Strathkelvin and Bearsden(Mr. Galbraith) has a distinguished medical career. In view of the nature of the new clause and some of the helpful suggestions that he made in Committee, he might think of a second career in finance should he ever lose his seat in the House.
Mr. Horam:
I agree with the hon. Gentleman. I would rather be a doctor than be involved in finance.
The hon. Member for Strathkelvin and Bearsden wanted to ensure that the Treasury was involved at the start. I can assure him, without fear of rebuttal, that the Treasury is involved throughout all the PFI schemes and I would not have it otherwise, because it looks at these things in a firm financial way. That is right and proper.
Mr. Galbraith:
My memory of this debate last week is that the Minister maintained that the Treasury could not possibly be involved in all the issues because there were far too many. Is the Minister saying that the position has changed since last week? Has the Treasury scrutinised the Stonehaven project? I believe that there was a suggestion that the Treasury might be involved above a certain limit. Is it involved in all the schemes, some of them, or none of them?
Mr. Horam:
The hon. Gentleman is right. There is a de minimis limit whereby the Treasury is not involved in some of the smaller schemes. For the major schemes, which are the purport of the Bill, it is involved. I remind the hon. Gentleman that about 22 smaller schemes have already gone ahead with the benefit of PFI and that some buildings are already being constructed and equipment is being installed. Clearly, for such small schemes, Treasury investigation is not necessary and the problem of liability on a large scale does not occur. It is only with the larger schemes where there is a possibility of the liabilities in some sense not being transferred that the Treasury is involved.
Mr. John Spellar (Warley, West):
For clarification, can the Minister tell us where the limit lies?
Mr. Horam:
Last Wednesday I told the House that the figure starts at £10 million, but it can be less than that on a sample basis, perhaps down to £4 million. I believe that, roughly, those are the figures. So the Treasury is involved in the bigger and medium schemes.
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