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11 Dec 2002 : Column 275—continued

Mr. Milburn: I enjoyed the hon. Gentleman's contribution for the insights that it provided into the Conservative party's thinking—or lack of it—on the NHS.

The hon. Gentleman mentioned funding for local primary care trusts. It is easy to stand at the Opposition Dispatch Box and welcome three years' funding for PCTs, but when Conservative Members had the opportunity to vote for extra resources for every local PCT they voted against it.

The hon. Gentleman asked about the GP contract. I do not know whether he has negotiated with a trade union—for example, the BMA—but I can give him some advice. In the middle of negotiations, one never declares one's hand.

The hon. Gentleman alleged that discussions on the formula had been conducted in secret and that the information would not be published. It will be published shortly. It is based on information from the University of Glasgow, the Information and Statistics Division Scotland and other universities in York and London. On secrecy, I remind him that, since 1976, every Government have taken evidence about the best way in which to distribute NHS resources through the same mechanism that we used.

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The hon. Gentleman went on, in his usual vein, to say that although he welcomed the resources, they never produce results for NHS patients. He asked where they went. I can tell him what happened to them in his constituency. North Somerset PCT is in his constituency. Last year, it used its 9.4 per cent. increase to ensure that no patients waited more than 15 months for a hospital operation and that no patients waited more than 26 weeks for a first out-patient appointment. There has been a drop of one third in the number of people who wait 12 weeks or more. In the Weston Area Health NHS trust, with which he is familiar, no one waited more than a month for breast cancer treatment, elective and non-elective activity increased, a new 15-bed observation ward opened at Weston hospital, and a new endoscopy service began at Clevedon hospital.

What the hon. Gentleman might have said is that he very much welcomes the extra resources that I announced for his local PCTs—an increase for his constituency and his PCT of 32.47 per cent. He had the temerity to welcome the measure, but when he had an opportunity to vote against the extra resources, he did so. He does not believe in the resources; he does not want to see the results. We all know why: he does not want the NHS to succeed; he wants the NHS to fail.

On foundation trusts, to which the hon. Gentleman gives such a warm welcome, I look forward to him and his colleagues voting for an extension of public ownership. I knew that they had wanted to find their own clause IV issue, but I had not quite realised that they wanted to pick up our old clause IV.

The hon. Gentleman asked about borrowing limits for NHS foundation hospitals and who will set them. The borrowing limits will be set according to a prudential code on borrowing, whereby the only way in which a foundation trust can borrow is against its ability to pay. The independent regulator, accountable to Parliament, will determine the borrowing limits for individual NHS foundation trusts.

The hon. Gentleman asked how much freedom the trusts will have in relation to XAgenda for Change". I set that out in my speech. The trusts will be part of XAgenda for Change". I think that he knows fine well that, within XAgenda for Change", there is considerable local flexibility for NHS trusts—foundation or other NHS trusts—to Xflex" upwards the rate of pay according to their local labour market circumstances.

In the normal course of events there would have to be consultation on a change in clinical services on the scale that the hon. Gentleman suggests. Local authorities' oversight and scrutiny committees would want to assess it and, if necessary, that would be referred to the independent reconfiguration panel.

The hon. Gentleman gave the game away when he failed to understand one simple thing about NHS foundation trusts: they are part of the national health service; they do not sit outside the national health service. He seemed to be skating very close to the position that he probably advocated in government, and which he now continues to advocate in opposition: that there should be no national standards, no national targets and a local lottery in care, whereby local hospitals are allowed to sink or swim not according to the communities that they serve but according to happenstance or their individual circumstances.

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The hon. Gentleman said that he found it difficult to understand the concept—and I perfectly understand why. What these NHS foundation trusts are not about is the sort of privatisation that he and the Conservative party advocate. This is a form of genuine public ownership, which Labour Members want to see.

Mr. Frank Dobson (Holborn and St. Pancras): Will my right hon. Friend accept that, like everyone on the Labour Benches, I very much welcome the additional funds and the effort to ensure a fairer formula for distributing them? I hope that he accepts that there may be some minor errors in the new fund and that it will be adjustable in the light of experience.

However, does my right hon. Friend also accept that nothing he said this afternoon stills many concerns of Labour Members about the likelihood that giving financial advantages to a limited number of hospitals will put them in a position where they can offer better pay and working conditions, and thus attract staff who are in short supply from neighbouring hospitals? In the case of my constituency, if University College hospital were to become a foundation trust and have vacancies for nurses, how could anyone stop nurses at Great Ormond Street, the Royal Free, the Chelsea and Westminster or Barts hospitals applying to fill those vacancies, which would offer better pay and working conditions?

Mr. Milburn: My right hon. Friend has probably not yet seen the cash figures, but there is an increase for Camden PCT of 31.35 per cent., which is a total cash increase of #76 million. I hope that will help with the real pressures that he and people in the health service have to deal with.

I have a huge amount of respect for my right hon. Friend and I very much enjoyed working with him when he was Secretary of State. On the issue of NHS foundation trusts, however, I believe that he is fundamentally wrong. He says that there is a danger of our somehow having two-tier care, and asks what will prevent a hospital from recruiting another's staff, yet he knows well from his own time as Secretary of State for Health that the national health service is not uniform. Sadly, different hospitals perform at different levels; some do very well and some not so well, while some need to do a lot better. That is the reality of the national health service, as it has been for many years. Of course, staff make their judgments in part according to how well local health services are doing. My right hon. Friend is wrong, incidentally, to say that NHS foundation trusts are just for the few; I want them to be for the many, and I believe that, in time, they can be.

I say in all candour to my right hon. Friend that there are two lines of objection to these proposals, one of which involves an absolute objection in principle. I have listened carefully to what he has said, especially during the debate on the Loyal Address, when he argued cogently that one way forward was to trial and pilot these trusts, so it does not seem to me that he objects to them in principle. [Interruption.] Well, that is what my right hon. Friend said. I heard his speech and I read it very carefully. The second form of objection is that, if the provision is good enough for some, it should be good enough for the many and, perhaps, good enough for all. I agree, but the question is how we get there. We have to

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ensure that we start with those hospitals with a proven track record of success. We must help to raise standards in all parts of the national health service—my right hon. Friend knows well that we are trying to do so—through inspections, standards, intervention, help and support. That is what we need to do, but we also need to provide some freedoms and rewards for the best-performing organisations, not least as an incentive to others to improve.

Dr. Evan Harris (Oxford, West and Abingdon): I thank the Secretary of State and welcome his improved performance in providing good time for Opposition spokesmen to read his statement. That is appreciated.

The right hon. Gentleman recognises that, unlike the Conservatives, my party voted for higher funding in the last Budget. Indeed, we called for that five years earlier.

Does the right hon. Gentleman accept that the first job in recognising that we have a sick patient is to accept that the previous treatment was poor? He said that the funding rise under the Tories between 1992 and 1997 was 1 per cent.—1.76 per cent., in fact—and that it was now 7 per cent. under his Government. Does he accept that the 3.5 per cent. funding that he delivered in real terms in the last Parliament was insufficient, and is part of the reason for our not having the capacity that we need?

The right hon. Gentleman recognised that what I have been saying about the freedom of foundation hospitals has been right. They will be subject to so-called NHS standards, so-called NHS ratings and so-called NHS inspections, but those are Government standards, political targets and flawed and distorted ratings. So there will be no change or freedom as a result of the target-driven approach that he is taking for these chosen few hospitals. They will, however, still be able to poach staff from other local trusts, or from developing countries. Will he answer a question that has not yet been answered? Is he satisfied with the fivefold increase in the number of nurses coming from countries such as South Africa, or with the fact that his own code of practice has still not been adopted by more than one third of the private nursing agencies that NHS hospitals use?

On the question of where the money has gone, I hope that the Secretary of State realises that, in the southern region alone, there are forecast deficits at the six-month point of more than #230 million. Does he believe that the extra funding should go towards paying debts that have accrued as a result of previous poor settlements, or that it should be used for front-line staff? Will he also explain why only 75 per cent. of funding is being handled by primary care trusts, rather than 95 per cent? Will he tell the House whether anyone out there supports the version of the star rating system based on his targets, rather than considering it to have a distorting effect on resource allocation and clinical priorities? Furthermore, why will the Secretary of State not get rid of private pay beds altogether from NHS hospitals? They use up vital NHS capacity and are allocated on the ability to pay, rather than on the basis of need.

Finally, will the Secretary of State accept that he must now go back to the drawing board? He has thrown away the baby with the bath water. He has pleased no one with the changes to NHS foundation hospitals because

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they will still be subject to Government control and will therefore not have the freedom to become new entities, such as public benefit organisations, which we would like to see. He is trying to please everyone, and trying to have it both ways. This is typical new Labour.

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