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Mr. John Redwood (Wokingham) rose—

Mr. Tim Yeo (South Suffolk) rose—

Dr. Reid: I shall give way, democratically, to the right hon. Gentleman on the Back Benches first.

Mr. Redwood: Will the right hon. Gentleman tell us which of the freedoms that he will grant to foundation hospitals he thinks they will use, and how will that improve things?

Dr. Reid: Yes, indeed. I was in Birmingham recently, and I commend the authority and the hospital that I visited. It had managed to build two new wards with 80 beds to assist people in that area. The building process took five months from start to finish, but the consultation process to get permission for the building took not five months but 10 times five months. A local national health service will be able to take such a decision locally, thus increasing efficiency and delivering a better quality of service than before.

Mr. Stephen Dorrell (Charnwood) rose—

Mr. Yeo rose—

Dr. Reid: I shall go for seniority this time and give way to the Front-Bench spokesman.

Mr. Yeo: I am grateful to the Secretary of State for giving way because my intervention is entirely helpful to him. I appreciate that he has been quite busy recently, so he might not have had time to study in detail the Bill and the proceedings during its passage through both Houses of Parliament. To help him to respond to the question asked by the hon. Member for Birmingham, Selly Oak (Lynne Jones), the Bill does not give foundation trusts the power to opt out of the incoming IT system. The Secretary of State was clearly unaware of that point.

Dr. Reid: I congratulate the hon. Gentleman on his new post, in which he will spend half his time on the national health service. If he thinks that I have difficulty coping with it, it is no doubt a sign of his innate capacity to think about and embrace larger subjects than anyone else that he is able to cope with health and education. It is an illustration of the Conservative party's priorities

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that it has appointed half a shadow Minister for education and half a shadow Minister for health, but two chairmen have been appointed to sort out the party.

The whole point of passing down power to hospitals with foundation status is to give them greater freedom to respond quickly to the needs and ambitions of today's patients.

Mr. Dorrell rose—

Dr. Reid: I shall make a little progress before I give way to the right hon. Gentleman because I want to respond to the helpful intervention by the hon. Member for South Suffolk (Mr. Yeo). I fully understand why the Conservatives are opposing our plans. It is not because they want to improve the national health service more than us, because that is one of the great promises—such as, "I will love you all the more for it in the morning", or, "I'm a Conservative and I love the health service more than you do"—that we have come to look at askance. They oppose the plans because they are frightened of the political consequences of the improvements. [Laughter.] I must tell the hon. Gentleman that his predecessor, who has gone on to become one of the two chairmen of the Conservative party, put that in explicit four-letter terms. He said that if we managed to carry out the improvements, the Conservative party's plans to run down the national health service would be flummoxed—I think that that was the word that he used. That is true, so the Tories oppose the measure because they know that as we succeed in improving the NHS, their attempts to undermine and attack it will have less effect. Their policy of cutting investment and attacking equality of access to health services will fail. Just as they opposed the formation of the national health service, they now oppose the reformation of our national health service because it stands for everything in which they do not believe. The reforms stand in the way of their alternative plan: to force people toward the private sector.

Mr. Dorrell: Rather than knocking down paper tigers and talking about why we oppose the Bill, will the Secretary of State return to the question asked by my right hon. Friend the Member for Wokingham (Mr. Redwood)? The Secretary of State cited the example of a hospital that, as a foundation trust hospital with new freedoms, would be allowed greater access to capital so that it could move quickly to build a new facility. Will he confirm that if such a hospital did that under the Bill, given that the capital allocation will be ring-fenced and the Treasury will put a ceiling on it, the money provided for such building would come at the expense of non-foundation trust hospitals?

Dr. Reid: The right hon. Gentleman speaks as if he is making a huge revelation. Of course there is a pot from which hospitals and other elements of the national health service—foundation trusts or otherwise—must take their money. The difference between what is happening under this Government and what happened under 20 years of the last Conservative Government—the right hon. Gentleman was Secretary of State for part of that time—is that we are making the biggest ever increase to the pot of money in the history of the national health service. When people in the NHS want

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to build, they now know that that is possible. When we came into power, nearly half of the NHS's buildings were older than the NHS itself. Under the plans for capital allocations during this term of government, almost half the buildings will be less than 15 years old by 2010. That is the answer to the right hon. Gentleman's question.

Mr. Michael Weir (Angus) rose—

Dr. Reid: I want to make progress.

The creation of NHS foundation trusts is part of the process of moving from an NHS controlled from Whitehall to an NHS in which standards and inspections are national, but delivery and accountability are local, with more diverse provision, offering more choice for patients. That agenda will not go away. Decentralisation is a necessary prerequisite of responding more personally and sensitively to the extra power for patients which the Government intend to deliver. It will form a major part of our programme for the next few years.

Clare Short (Birmingham, Ladywood): Most of us agree that there should be more decentralisation in the health service, as we said in our manifesto, but many of us object to the current proposal because it allows the most privileged hospitals to decentralise. Giving them greater authority and more privileges will lead to growing inequality. Why not decentralise across the system?

Dr. Reid: First, with the greatest respect to my right hon. Friend, she is not exactly correct. The proposal gives the first foundation status opportunities not to the most privileged hospitals but to the best performing hospitals. Some of them are in more socially affluent areas, but others are not. Many good performing hospitals are in relatively underprivileged catchment areas. Secondly, and importantly, even if my right hon. Friend's premise were correct, her conclusion would be wrong because we do not intend to limit the opportunity to the first wave. Within four years we intend to raise every hospital in the country to the level at which we can free them from some of the central restrictions. That is one compromise that we made after discussions with my right hon. and hon. Friends. Our initial intention was to give foundation status to only a few hospitals, but after consultations with colleagues inside and outside the Government we agreed to extend that opportunity to everyone within four years.

NHS foundation trusts will be established as a new form of common ownership—a new public benefit organisation. They will still be part of the NHS family, with the purpose of providing NHS services to NHS patients. The care they provide to NHS patients will be, as I said, delivered on the basis of need, not ability to pay, and will be free at the point of use. The foundation principles and values of the NHS will be protected, but the system by which that is delivered will be decentralised and modernised. They will be locked into public ownership, which is the main thing that Opposition Members oppose. They know that a thriving local hospital, owned by local people in a way in which national services have never been owned before, will defend itself politically against a future Conservative

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Government's plans to privatise the NHS. That is what Opposition Members do not like about foundation hospitals.

Dr. Desmond Turner (Brighton, Kemptown): I greatly sympathise with my right hon. Friend's argument that trusts need to be freed of much of the bureaucracy that gets in the way of their effective operation. However, does he agree that as most of those directives on bureaucracy emanate directly from his Department in Whitehall, we do not need an Act of Parliament to deal with it?

Dr. Reid: It does not need an Act of Parliament to deal with all of it; it does need an Act of Parliament to deal with some of it. My hon. Friend is right that our proposals do not go as far as I should like. We have compromised. I have no shame in talking about compromise. We have compromised with colleagues inside and outside the party—people at the front line—to get a balance. The idea that we have not gone as far as the Conservatives would like, so they will vote against our moving in the direction they theoretically want us to go in, is sheer opportunistic hypocrisy.

We agreed, for instance, that all foundation trusts must pledge themselves to the long-time negotiated "Agenda for Change" with the health unions. That compromise benefits all workers inside and outside foundation trusts.

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