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3.15 pm

Mrs. Alice Mahon (Halifax): Will my right hon. Friend give way?

Dr. Reid: If my hon. Friend lets me make progress, I shall I try to take her intervention later.

I want to illustrate how far we have gone in our discussions on compromise. We will insist on reinserting the statutory limit on the proportion of private patients treated in NHS foundation trusts, removed by the Opposition in another place. We have agreed to limit the borrowing powers, as explained earlier, of NHS foundation trusts through a prudential borrowing code. We have compromised on, and listened to, a number of concerns. Those are just a few examples.

In addition, we have tabled amendments, because people have raised the issue, on the way in which the membership of the trusts will be drawn up—that is, the membership from which the governance will be vested. There are also amendments on the sub-division of the electorates on the board of governors, the safeguarding of patient information and, for English hospitals, the extension of the public constituency to Wales in certain cases where that would be relevant.

Several hon. Members rose—

Dr. Reid: I will give way to my hon. Friend the Member for Cardiff, Central (Mr. Jones) and try to get around to my other hon. Friends.

Mr. Jon Owen Jones (Cardiff, Central): I wish my right hon. Friend had not made so many compromises, but I understand why he has done so. Will he remind some of our hon. Friends that the Government, who

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have invested 70 per cent. more funding in the health service, have produced a better health service? By comparison with the investment made, however, we are making slow progress. Some of our colleagues need to understand that with that investment comes a need to reform; otherwise, we will not make the changes that our electorate so desire.

Dr. Reid: I agree with my hon. Friend. I have no doubt about the sincerity of the commitment of every Labour Member to the NHS. The debate is worth while, but those who believe that increasing capacity and putting more money into the health service will be enough are mistaken. Unless that is accompanied by reform, we will not safeguard the NHS for the next 50 years. For any given level of capacity we need to increase the quality of output, increase the speed of delivery of operations and give patients more information and choice over what they are doing. If we are to do that, we must decentralise the delivery of health care so that the local units, whether they be GPs or hospitals, can respond to the patients themselves when they exercise that new choice. All of that is about defending the NHS from both sociological changes and Opposition Members who would destroy it.

Kate Hoey (Vauxhall): I take the Secretary of State's point about patient choice and devolved powers, but surely the crux of the matter is that the purse strings are held by the primary care trusts. The manoeuvring and changing is not necessary. If we were to democratise the system, we should have started with the PCTs.

Dr. Reid: My hon. Friend is a little unfair. First, the PCTs are a huge decentralisation of power. Some 75 per cent. of our money goes through them. Secondly, I hope that the PCTs will not stop at the level of decentralisation that they have already achieved, but will involve GPs and others in the primary care sector in planning their health commissioning. Thirdly, patient forums are involved in the PCTs. However, even if we managed to democratise the formalities, giving power to patients is more than formal democracy. It means giving them a real choice. It is hypocrisy to argue that such choice can be provided while cutting the capacity of the NHS or diverting money to subsidise the 5 per cent. who are rich enough to buy their own operations. It is not hypocrisy to ask for a further degree of choice while putting in extra capacity, as we are doing.

Several hon. Members rose—

Dr. Reid: I genuinely must make some progress. Hon. Members will understand that if I do not, the accusation will be made that I have taken up too much time.

I have illustrated some of the compromises that we have made, but I have an important reassurance for hon. Members. Since I became Secretary of State for Health, some colleagues have specifically asked me to reassure them that we will learn from the experience of the NHS foundation trusts set up in the first waves in 2004. Some colleagues have expressed concern that we will not be in a position to learn from the experience of the first NHS foundation trusts before the rest of the

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NHS can apply for that status. They have asked me to explain our willingness to review and to learn as we go along. I have listened to those colleagues and I want to make it clear that we will of course review the experience of the first waves. Indeed, we will have particular opportunity to do so in the 12 months between the end of the first waves in the autumn of 2004 and the autumn of 2005. We will be able to carry out just such a review in more detail at that time. I will ask the Commission for Healthcare Audit and Inspection, which is of course accountable to Parliament and not to me, to assist me in that review. Obviously, during that period, I would not pass on any new application for a new NHS foundation trust to the regulator. That is the most forthright, succinct and clear indication that I can give to all hon. Members that we are prepared to learn the lessons—the obstacles as well as the opportunities—of the new foundation status as we go along. I hope that that reassures those colleagues who have asked me about that point.

Ms Joan Walley (Stoke-on-Trent, North): I accept that my right hon. Friend is looking to find some way to build on the wonderful work that has been done by Labour in the NHS, but why do we not learn the lesson of the resource allocations working party and the inequalities that there have been in health? I am looking for some assurances about "Agenda for Change". In chapter 8 of that document, it says that foundation trusts will be able to pay their staff far more than other hospitals. That will increase health inequalities, not decrease them. What will he do to ensure that the ability of foundation trusts to poach staff will not undermine the good work that the Government have done?

Dr. Reid: With respect, my hon. Friend is misreading chapter 8. "Agenda for Change" was agreed after two years of discussion with all the trade unions involved. It includes a flexibility to pay staff above the minimum agreed levels, but that does not apply only to foundation hospitals. It applies to all hospitals. If my hon. Friend is saying that some hospitals attract staff because they are perceived to be better than other hospitals—because they are teaching hospitals, have a better reputation or are more convenient—that has not been instigated by foundation trust status. It has always been the case. However, for the first time in the NHS we have an agreement worked out in great detail over two years—largely by my right hon. Friend the Minister of State, and I pay tribute to him—that involves 1.3 million people, from porters and cleaners right up through nurses and doctors. It even includes consultants, who for the first time have signed a contract to pledge a significant increase in the amount of face time that they have with NHS patients.

Mr. Andrew Lansley (South Cambridgeshire) rose—

Dr. Reid: I will give way to the hon. Gentleman because he has long been a supporter of foundation trusts. I trust that he will vote with us tonight.

Mr. Lansley: I will vote as I did on 8 July. The Secretary of State should listen carefully to the hon. Member for Stoke-on-Trent, North (Ms Walley). Addenbrooke's hospital in my constituency will be in

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the first wave of foundation trusts. It wants to implement "Agenda for Change" and it knows that as a foundation trust it will be an early implementer of the new funding flows. It will get additional money to implement "Agenda for Change" at an early stage.

Dr. Reid: I congratulate the hon. Gentleman on the performance of his local hospital and on the support that he has given it in its quest for foundation status. I am sorry that his promotion means that he is in a straitjacket when it comes to voting tonight for what he believes in. I am sure that my hon. Friends will remark on the discipline that has been imposed in the attempt to inflict a defeat on the Government tonight. Perhaps they will bear that in mind. I am afraid that I have to correct the hon. Gentleman factually. It is not necessarily the case that foundation hospitals will implement "Agenda for Change" prior to everyone else. We are working on the guidelines on that point at present. [Interruption.]

I will try—if I can do so through the noise from Opposition Front Benchers—to sum up our position tonight. We face an important, crucial and controversial—because it is radical—vote in the House.

Mrs. Joan Humble (Blackpool, North and Fleetwood): Will my right hon. Friend give way on the subject of his important announcement?

Dr. Reid: If it is an announcement that my hon. Friend will support the Government tonight, I will gladly give way.

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