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Mr. Martin Salter (Reading, West): I note from the amendment that we are being invited to decline to give the entire Bill its Second Reading instead of waiting to see the nature of the Bill that emerges from Committee on Report. That is perhaps a strange way of going about parliamentary business. Can the Secretary of State advise me as to what my constituents would lose if other parts of the Bill unrelated to foundation trusts were to be lost?
Mr. Milburn: They would lose the whole Bill. They would lose the new inspectorate, the new provisions for NHS dentistry, and the new cost recovery scheme that ensures that it is no longer the taxpayer that pays for wrongdoing, but the wrongdoer, which is precisely the principle that Labour Members have long argued for. The Bill contains a raft of measures. I readily admit that some are more popular than others, but none the less it
is a Bill that is about modernising and strengthening the whole national health service, and doing so on the basis of NHS principles.
Mr. Bercow: Given that the Secretary of State, backed by the Prime Minister, originally appeared to support the principle that foundation hospitals should be free to borrow on the open market, outwith central control, in order to fund the necessary expansion of services, but that he has now submitted to the imposition of a Treasury straitjacket, can he tell the House whether he and the Prime Minister came to be persuaded that the Chancellor was intellectually correct upon this subject, or did they just think it politically expedient to give in to him?
Mr. Milburn: The Bill gives NHS hospitals substantial new freedoms to borrow. They did not have the right to borrow from the private sector in the past but they will have it in future. Hospitals told me that they want to use the extra capital that they will get through borrowing to invest in new scanners, more efficient equipment—
Mr. Milburn: I shall give way shortly, but I have given way many times and many other colleagues want to speak. [Interruption.] I am generous and I hope that others will reciprocate later.
Hospitals have told me that they will use the extra resources to invest in new services not only in the hospital but in the community. Clause 12 provides that they can borrow only what they can afford to repay. To those who say that that will mean robbing Peter to pay Paul, clause 3 makes it clear that the independent regulator, who is charged with policing the way in which NHS foundation trusts work, will have to take account of the impact of their borrowing on the wider health service.
In discharging his functions, clause 3 provides that the independent regulator will have to take account of the Secretary of State's wider obligations under the National Health Service Act 1977, which a previous Labour Government passed to
- "provide a comprehensive health service and the effective provision of health services which also must be free of charge".
Mr. Milburn: No, not for a moment or two. I have given way a lot.
Some of my hon. Friends have expressed anxiety that NHS foundation trusts undermine the new primary care trusts. I want to reassure them that that is not the case. National health service foundation trusts will rely on PCTs for their income in the same way as every other NHS hospital. Primary care trusts will continue to have the power to use their resources as they see fit. To strengthen the hand of primary care in general, especially PCTs, they will also be represented on each NHS foundation trust's board of governors.
Hospital will not be forced to compete against hospital. The Bill enshrines co-operation, not competition. When my right hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) first introduced a legal duty of partnership in the Health Act 1999, he said on Second Reading:
- "The Bill will give all the national health service organisations a duty of co-operation, in place of the competition that the Tories tried to force on them".—[Official Report, House of Commons, 13 April 1999; Vol. 329, c. 41.]
Mr. Michael Clapham (Barnsley, West and Penistone): On Friday, I met representatives of my local primary care trust and my local hospital trust in Barnsley. I asked them how they believed that foundation hospitals would affect the community. They said that they thought that they would be detrimental because the PCT has a substantial deficit, which was carried over from the previous area health authority before we moved to strategic health authorities. The debt is approximately £13 million, which has to be brokered each year. That means that there is less money to go round. They fear that if a neighbouring hospital receives foundation status, it will attract people from Barnsley, who will rightly expect to receive the better treatment. That will draw resources from the area, to the detriment of—
Madam Deputy Speaker (Sylvia Heal): Order. The hon. Gentleman should conclude his remarks. I think that the Secretary of State understands the question.
Mr. Milburn: The Bill does not alter the power of the primary care trust in any way, shape or form. The PCT holds the power. I have found that, in life generally, and especially in the case of public services, those with more money have a bit more power. The PCT will decide where the money goes in my hon. Friend's constituency as it does in mine and in every other constituency.
Mr. Frank Dobson (Holborn and St. Pancras): I did not intend to intervene on my right hon. Friend, but since he has mentioned me, I shall ask a question. If the proposition that all parts of the national health service should co-operate is to continue to apply, why did he tell primary care trusts that he wanted hospitals to compete for their business?
Mr. Milburn: With all due respect, my right hon. Friend knows that that is not the case. He was partly responsible for introducing primary care trusts. They rightly argued that we should have one local organisation that could commission services in a way that was appropriate to the needs of the local community. It is up to the primary care trust to decide where best to deploy its resources. That must be right otherwise we will never get the best services for NHS patients. The Bill's purpose is to ensure that we get the right services to patients.
Dr. Liam Fox (Woodspring): The Secretary of State has just said that power lies with the primary care trusts.
In that case, why will the Bill "democratise the providers", to use his words, and not the commissioners of health care?
Mr. Milburn: I believe that the hon. Gentleman has been present for most of my speech. Perhaps he was asleep for part of it. [Interruption.] It is a long speech because I have tried to answer a lot of questions, including many from Opposition Members. I answered the hon. Gentleman's question when I replied to my hon. Friend the Member for Vauxhall (Kate Hoey), who is my local Member of Parliament. It was right to answer her question because I ask her many questions. I said that I had no problem with applying the principle of democratisation to primary care trusts but that now is not the right time to do it because the PCTs are not new.
Mr. Stephen Dorrell (Charnwood): The Secretary of State says that he has no objection in principle to introducing a democratic mandate into the primary care trusts when they are more established institutions. However, is not he creating a dilemma that cannot be resolved? There will be two democratic mandates—one in the NHS foundation trusts and the other in the PCTs. Which will prevail?
Mr. Milburn: The right hon. Gentleman makes a reasonable point, which I shall try to answer reasonably. It depends on the form of democratisation that one would select for primary care trusts. For example, in the Bill, we have opted for a membership structure because the people who become members of an NHS foundation trust will incur specific legal obligations. It must therefore be right for them to opt into those obligations, which would otherwise be imposed on them. There are other forms of democratisation. For example, for primary care trusts, we could choose a model that was based on a local authority area, not least because many PCTs are now coterminous with local authority areas. The right hon. Gentleman looks startled, but coterminosity exists between PCTs and local authorities. If he wants such a proposal to be taken forward and the principle entrenched, I hope that he will vote for the foundation principle. I suspect that the hon. Member for Woodspring will tell us that Conservative Members will vote against it.
Mr. Milburn: I presume that the right hon. Gentleman wants to make a personal statement.
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