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Madam Deputy Speaker: Order. The House must come to order.

Dr. Fox: This is the usual behaviour when the Government do not want to hear things. The Chief Secretary to the Treasury in particular should listen to what I am about to quote.

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When, on 10 April, I asked the Government about potential privatisation plans, I said:


The Chief Secretary to the Treasury, who is now in his place, immediately shouted, "That sounds like charges." Sadly, I had to agree that it did sound like charging, but they were not my words. They were the words that the Prime Minister used in his February 2003 lecture entitled, "Where the Third Way Goes from Here". The Opposition have not discussed co-payment in relation to the public services. The Prime Minister has very specifically introduced the idea in relation to those services.

Hugh Bayley (City of York): My right hon. Friend the Secretary of State mentioned the cancer specialist Professor David Kerr. He told me last week that, despite the progress made with the NHS cancer plan, it can still take between four and six months in some hospitals for a patient with a cancer who has been referred by a GP to get to the point of treatment. A similar patient in an American hospital could go through the patient journey, to use the modern jargon, in four to six days. Professor Kerr told me that he needs the changes in this Bill to allow hospitals to reorganise their cancer services to meet the better standards. Why are the Opposition standing in the way of consultants such as David Kerr, who want to drive up standards?

Dr. Fox: I suggest that, for every consultant in favour of foundation hospitals, the hon. Gentleman will find many who oppose them, but he makes an interesting point. If he is suggesting that foundation hospitals move in the direction of the American health care system and the benefits that it brings, that is an interesting point of view. I think that he will find that his views are in stark contrast to some of the remarks made by the Chancellor of the Exchequer.

Sadly, the Chancellor of the Exchequer cannot be with us today. Cocooned in his time warp, he opposes what he considers to be dangerous ideological ideas, and the Prime Minister has neither the courage to remove him nor the strength to face him down. The Chancellor, either directly or indirectly, has sought to rubbish any reforming ideology before systematically emasculating any specific policy proposals.

The gap between the Prime Minister and the Chancellor is very clear. I shall give the House the best example of that. In his speech to the Social Market Foundation in February, the Chancellor said that, in health,


The Prime Minister said in his speech to South Camden college that choice mechanisms


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Both views cannot be correct at the same time. It was into that heady and toxic mix, the battle for the soul of and—perhaps more importantly—the succession in new Labour, that the idea of foundation hospitals was introduced.

Mr. Milburn: Which view do the Opposition agree with?

Dr. Fox: Our view on competition and markets is, of course, much closer to that of the Prime Minister. That is because his view is far closer to ours than it is to that of his own Chancellor of the Exchequer. The Opposition have always been supportive of the concept of foundation hospitals as developed in Spain and Sweden, for example. We have visited those countries to look at the foundation hospitals. An incoming Conservative Government would be comfortable with the models developed there, but we do not see them as an end in themselves. Such hospitals would be among the building blocks that we would use to create a more diverse provision of health care that was increasingly independent of state control.

Andy Burnham (Leigh) rose—

Dr. Fox: It is therefore sad to see the emasculated version of foundation hospitals presented in the Bill.

Mr. John Redwood (Wokingham): Will my hon. Friend tell the House which extra freedoms he thinks that foundation hospitals should enjoy, compared with the garbled model presented by the Government? That may calm Labour Members' impatience, as I think that they have not yet grasped his argument.

Dr. Fox: My right hon. Friend—[Interruption.]

Madam Deputy Speaker: Order. The House must come to order.

Dr. Fox: My right hon. Friend should know that we can explain the matter to Labour Members, but that we cannot understand it for them.

Andy Burnham rose—

Dr. Fox: The emasculated version of what has been established in other countries that is contained in the Bill is not the programme of a bold and reforming Prime Minister. It is a timid and pale imitation of what works elsewhere.

Mr. Jon Owen Jones (Cardiff, Central) rose—

Dr. Fox: Of course, the radical rhetoric will remain, but the sad reality will change insufficiently. As ever, the proposal has been spun wonderfully, but it will not be sufficient to turn the NHS around. It may well produce the worst of both worlds for the Government, whose overblown rhetoric maximises anxiety about change but whose lack of delivery still further frustrates voters whose taxes have risen but who have seen no clear benefits.

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In answer to the question posed by my right hon. Friend the Member for Wokingham (Mr. Redwood), I shall look at the details of the proposed foundation trusts. The first area for concern is borrowing. In May 2002, the Secretary of State said that the intention was that foundation trusts would


What will foundation trusts in fact get? They will have a limit imposed by the regulator, and that limit will be reviewed annually. If a foundation trust were a free-standing organisation in the voluntary sector or the private sector, there would be no one imposing a limit. Each borrowing need would be reviewed on its merits, and the lenders would decide whether to advance the money. In the private sector, limits are negotiated, not imposed—at least, they are not imposed on well-run organisations.

An annual limit is just laughable. What about the longer-term security and planning that we were promised? What happens if the foundation trust comes up with a good idea to expand services during the year? Before it can proceed, a hospital wanting a new MRI—magnetic resonance imaging—scanner, for instance, will have to tell patients that it must wait until the following year to find out what borrowing the regulator will allow. What kind of freedom is that?

When a foundation trust gets its borrowing limit—determined by the regulator—where can it go for money? It can borrow money, but it has little real freedom as to where and how it borrows. How does that compare with the freedoms in the voluntary and private sectors? The private sector can create floating charges over its assets. Foundation trusts will be debarred from that. The private sector can enter into asset financing deals, but foundation trusts will have to ask permission from the regulator if the assets are protected property. Will scanners, for example, be protected property? Will foundation trusts have to get the regulator's agreement every time they want to improve medical equipment through the year?

Given those restrictions, it would be very surprising if foundation trusts could borrow from the private sector, as the Secretary of State has suggested, unless the Secretary of State was willing to underwrite their liabilities. That may have been what he wanted originally, but the Chancellor of the Exchequer denied him that.

The real damage produced by the borrowing restrictions will be found in the effect that the system will have on non-foundation trusts. The Chancellor's emphatic ruling that foundation hospitals will be able to borrow only within the total NHS budget has confirmed the fears on all sides as to what the Bill would mean in practice. The Chancellor has made it perfectly clear that, if any foundation hospital wants to borrow more, other hospitals inevitably will get less. The Bill will create a dog-eat-dog culture, in which financial growth in foundation hospitals will mean cuts in the budgets of hospitals elsewhere. Progress in foundation hospitals will inevitably be at the expense of patients elsewhere.

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I had expected Labour Members to want to intervene at that point, but none seems to want to do so.


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