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3.15 pm

I have addressed the damage that foundation hospitals are likely to do to the health service. I confess that, as a Labour party member, the damage that the policy will do to the Labour party bothers me just as much. Almost everybody in the labour movement is opposed to this proposition, and their instincts are right. It was suggested to me on the radio the other day that perhaps the leadership of our party did not want us to speak up against foundation hospitals because it looked as though we were the party of the producer. If the producers are the doctors, nurses, midwives and therapists—the people who actually provide the care for the patients—I would rather be on their side than on that of faceless think-tanks and advisers, who seem to think that the world can be transformed with the click of a laptop button. If I must choose between the laptoppers and the producers, I am with the producers.

Mr. Lansley: I have two groups of amendments in this gargantuan group, and I shall refer to them briefly and to the general proposition, as advanced by the hon. Member for Wakefield (Mr. Hinchliffe). I am grateful to him for his kind comments. If I know anything about the NHS, it is in part due to serving under his chairmanship of the Health Committee, and in part to my father. On the day on which the NHS was created, my father was working for London county council, running a health service laboratory. He worked for the NHS for the next 35 years and became chairman of the Institute of Medical Laboratory Sciences.

There are Conservatives—including my hon. Friend the Member for Woodspring (Dr. Fox)—who have worked for the NHS, and who would resent the way in which the Minister referred to our intentions. Our intentions are to try to create an NHS that delivers more and better quality health care for the people of this country. We may have different views on how to achieve that, but I hope that the Minister will not dispute that that is our intention.

Some of us will also join the hon. Member for Wakefield in resisting the structure of foundation hospital status, as the Government propose it, for different reasons, but with the same intentions. We will not have many opportunities in the next year or so to discuss the structure of the legislative framework for hospitals, so we have to get it right. Behind some of my amendments is the desire to get the structure right this time.

My first group of amendments runs from No. 154 to No. 161 and relates to the possibility that a combination of NHS trusts might wish to apply for NHS foundation status. The Minister mentioned Government amendment No. 357 and new clauses 36 and 37. I am grateful to the Government for tabling those provisions, because they will allow foundation trusts and NHS trusts to apply for authorisation as NHS foundation

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trusts by way of a merger. The previous structure of the legislation implied that one NHS trust equalled one NHS foundation trust. We discussed the issue on Second Reading and again in Committee, and Government amendment No. 357 and new clauses 36 and 37 remedy that deficiency, so I am happy that the Government have tabled them.

The other group of amendments that I wish to speak to begins with amendment No. 96, but its essence is contained in new clauses 19, 20 and 21, which would introduce the concept of NHS community trusts alongside the foundation trusts.

Siobhain McDonagh (Mitcham and Morden): Will the hon. Gentleman support the application of Addenbrooke's hospital in his constituency for foundation status? If so, why would he vote against them today?

Mr. Lansley: The hon. Lady anticipates a subject that I was about to discuss. I have already said that I would support the applications by the Addenbrooke's NHS Trust and Papworth Hospital NHS Trust, both of which are in my constituency and both of which are applying for NHS foundation status. Whether there is a foundation trust status in the form proposed available for them to apply for will, of course, depend on the decisions of the House.

Claire Ward (Watford): But the hon. Gentleman is voting against the Bill.

Mr. Lansley: I am answering the hon. Member for Mitcham and Morden (Siobhain McDonagh). If the hon. Member for Watford (Claire Ward) wishes to intervene as well, I will gladly give way.

I will support Addenbrooke's because it is an excellent hospital at the leading edge of medical research, clinical practice and innovation in the NHS. The view of the trust, with which I agree, is that it wants to be at the leading edge of innovation within the NHS, wherever the NHS is going. If the Government tell Addenbrooke's that NHS foundation trust status is the way forward for the NHS, Addenbrooke's will go along with that, and I will support it. On each occasion that it has acted in a similar manner, resources have tended to flow from that decision. The word that we have not yet heard is "capacity". Addenbrooke's NHS Trust is running at about 95 per cent. bed occupancy now, and if it is to be able to increase capacity to serve my constituents, it will have to be at the leading edge of the NHS.

Papworth Hospital NHS Trust is a complementary case. It is a heart and lung hospital, and the fastest growing hospital in the country. It, too, needs to increase capacity. It did not succeed with a private finance initiative bid in 1998, shortly after the Government came to power. I want that trust to be able to undertake its necessary capital projects. As things stand, it could do that in one of two ways: through PFI or by borrowing the money from the Department's facility. This has not previously proved an easy bid to finance through PFI, but it might well be able to arrange

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that borrowing through the departmental financing facility as extended in the Bill. It might also be able to do so on better terms, given that it would be doing so at the national loan fund rate.

I am a practical person. If the legislation is in place, I will support my hospitals in using it to their best advantage. I would like to be able to persuade the Government to introduce legislation that offers genuine freedoms to NHS hospitals, providers and commissioners. My purpose in voting with my Front-Bench colleagues today will be to tell the Government that they need to introduce such legislation. I shall give way to the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), who has previously been denied that opportunity by his Front-Bench colleagues.

Mr. Stevenson: The hon. Gentleman says that if foundation hospitals become a reality, he will support Addenbrooke's because the resources would flow from that decision, but will he have a care for my constituents, who will not benefit from the first wave of foundation hospitals and are likely to lose out as a result?

Mr. Lansley: I am not sure that the hon. Gentleman's constituents will necessarily lose out in that way. The Minister would not give way to me earlier, but I wanted to make the point to him that he is trying to tell the House that NHS foundation trusts and NHS trusts are on all fours. They are not. For example, he has not yet told us what he is going to do about year-end surpluses in relation to NHS trusts. I want Addenbrooke's, which has resolved its deficit problems and which, with the national tariff, will be able to generate a surplus, to be able to carry over that surplus at the year end. As an NHS foundation trust, it would be able to do so. The hon. Gentleman's constituents would not necessarily lose out as a result of that flexibility, however. It is in the Minister's gift to get up now and tell us that he will offer year-end surplus transfers to all NHS trusts. If he does so, fine. We would then be nearer to the point at which every trust would be the same.

So far as borrowing is concerned, there could be a difference between NHS trusts and NHS foundation trusts. That will entirely depend on the Minister making an assertion that, during the years that foundation trust status is available only to some hospitals, the Department's ability to finance their borrowing will not constrain the availability of capital for the others.

I have departed from my main point, and want to return to the amendments. In the event that the House decides to proceed with NHS foundation trust status, and not to reject it at the instigation of the hon. Member for Wakefield, an important second question will arise. Should foundation status—the mutualisation and local ownership of decision making in the NHS—be confined to hospitals, or should it be provided to the commissioning bodies, the primary care trusts? My hon. Friend the Member for Woodspring and the hon. Member for Oxford, West and Abingdon (Dr. Harris) both said that the latter proposal was entirely desirable. The Select Committee report referred to the evidence of many witnesses who suggested that it was not only desirable but arguably the logical place to start with such measures.

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The Government responded to the Select Committee report yesterday, and their attitude seems to be "Make us virtuous, O Lord, but not yet." They say:

We know what that means. It could be many years before new primary legislation is introduced to give primary care trusts, as commissioners, the opportunity to be locally owned.

The purpose of new clauses 19 to 21 is to introduce a community trust status that would apply to primary care trusts and enable them to become locally owned. I hope that the proposals are carefully drafted, and they incorporate certain safeguards. As with NHS foundation trusts, PCTs would not be able to apply for community trust status until the Secretary of State had given his approval for them to do so. He would, therefore, still have a block on the speed at which they could apply.

It is not possible simply to add PCTs into foundation trust status, because the form of the constitution is not precisely right for that. The way in which the community trusts are written into the amendments and new clauses would stress to a greater extent the proper role of the staff constituency and set a minimum of one third of the membership of the board of governors for the staff constituency. In making this transfer, we would be asking general practitioners and other primary care professionals to hand over a significant part of their current control over primary care trusts to the local public. We would therefore put in place a mechanism, which I hope the House will accept, to offer that choice. It is vital that we do so, otherwise it may be many years before PCTs have the chance of local ownership, and during that time the balance will shift dramatically in the NHS. It is important that that balance continues to be geared towards primary care, as we are seeking a primary care-led NHS. I shall use my locality as an example.

If there is a dominant hospital in Addenbrooke's NHS Trust with a multiplicity of primary care trusts acting as commissioners and if, at the same time, the NHS trust has a large local membership that believes that it owns Addenbrooke's hospital, not only does the PCT have less power in relation to the NHS trust than it used to, but it will be perceived locally as being less locally owned than Addenbrooke's hospital. When questions of priority come to the fore, people will expect the hospital, rather than the PCT, to be their voice which, to me, seems the wrong way round.

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