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Dr. John Reid: Will the hon. Gentleman give way?

Mr. Yeo: In a moment. Let us be clear: for several years, most of the hospitals that serve our constituents will not have foundation status. Only a handful—25—will qualify in the first instance, and the privileges obtained by them will be paid for by other, less fortunate hospitals.

Dr. Reid: I wanted to intervene because I was so moved by the hon. Gentleman's passion for eradicating inequalities in health care. Now that he has put the onion away, can he explain to the House how taking money out of the national health service and giving it to those who can afford half the private cost of a heart bypass—£10,000—so that they can jump the queue quicker, would increase equity in the health service?

Mr. Yeo: Given the Secretary of State's lamentable performance in defending his own policies this afternoon, I look forward with relish to debating the Conservative party's proposals on the future of the health service at the appropriate time. There is limited time this afternoon to deal with issues that are of great concern to Members on both sides of the House, so I shall address the subject covered by the amendments.

In terms of the two-tier service, the victory that the Treasury scored over the Department of Health last year has particularly damaging consequences, because borrowing by foundation trusts will count against the Department of Health's overall totals. By making investment a zero-sum game, the Secretary of State has ensured that extra investment by foundation trusts will impoverish non-foundation trusts now, and for a considerable time to come. He claimed this morning

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that all national health service hospitals will gain foundation trust status within four years, but the question arises of whether that claim has been cast into doubt by what he has just said about a review of the first wave's performance at the end of 2005. In any event, four years is a long time for hospitals to languish in the second division, especially as, by definition, it is the weakest hospitals that will do so. Therefore, under the Secretary of State's plan, the hospitals that most need new investment will be the last ones to get it.

Another serious flaw in the clause concerns the nature of the foundation trusts that the Bill will establish, if it is passed. I have a long-standing interest in the role of independent hospitals. [Interruption.] Yes, it is a subject of which I have considerable direct experience having been chairman for eight years of the charitable trust that in 1983 took over the management of a former NHS hospital, Tadworth Court children's hospital.

That hospital, once the country branch of the Hospital for Sick Children, Great Ormond Street, faced closure in 1982. I led a successful campaign to keep it open, at the end of which an independent charitable trust was established to run it. Twenty years later—if the Secretary of State is interested in this rather important example of what a genuinely independent hospital can do—that children's hospital is vibrant, thriving and greatly expanded. I visited it last Friday in preparation for this debate. It is responsive to patients' needs, innovative in the services that it provides and outstanding in the quality of care that is offered by its professional and other staff to many children and their families.

The crucial ingredient in that remarkable success story has been the independence that the doctors, nurses and management have enjoyed—independence that, alas, foundation trusts are not granted by the Bill. Even though a Downing street press notice on 9 October 2002 suggested that foundation hospitals would be

under the Bill, foundation trusts will be as constrained in almost all respects as existing NHS trusts, prompting the Office for National Statistics to rule:

The ONS concluded:

not a happy precedent.

Under the Bill, foundation trusts are burdened with governance arrangements that are complex, confusing, ill defined, expensive and time consuming to operate. As much as £250,000 a year may be spent by each hospital in defining constituencies and running elections. The time and attention of doctors and managers will be diverted from patient care. There is a risk that foundation trusts may fall prey to pressure groups. As the hon. Member for Vauxhall (Kate Hoey) pointed out, it is not clear why the Government have chosen to address their concerns about governance to providers rather than to commissioners.

There are many other reasons for opposing the Bill but, in the interests of allowing other hon. Members to

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take part in the debate, I make one final point. Some people have suggested that, because certain features of foundation trusts proposed by the Government have a resemblance to our policies, we should not oppose the Bill but let it pass in its flawed state, with the intention of correcting those flaws as soon as we have the power to do so. That is a superficially tempting argument but it does not wash for two reasons.

First, as I have said, the Bill in its present form is a step in the wrong direction. It makes matters worse, not better. Secondly, the health service has been through many reorganisations in recent years. The Government now propose another upheaval. For us to encourage or even to condone that in the certain knowledge that, two years from now, we would have to impose yet more change to put right what Labour is doing would be grossly irresponsible.

The Bill does not provide reforms that will improve the NHS. It does not give hospitals the freedoms that they deserve. It creates a dog-eat-dog culture in the NHS. It is opposed by a formidable array of professional and other bodies. This debate and the vote that will follow it is almost certainly the last chance to block a proposal that, in their hearts, a majority of hon. Members on both sides know is wrong. Rejecting clause 1 will give the Government a chance to reconsider and to listen to the many voices pleading for change. They could then return to Parliament in the new Session with a Bill that does not divide the haves from the have-nots, and that gives foundation trusts genuine freedoms for the benefit of patients and their families. I urge the House to vote against the motion.

Several hon. Members rose—

4 pm

Mr. Deputy Speaker (Sir Michael Lord): Order. Before I call the next speaker, I remind the House that Mr. Speaker has placed an eight-minute limit on speeches by Back-Bench Members. That applies from now on. I call Mr. David Hinchliffe.

Mr. Hinchliffe : This is the first debate to which I have contributed since my right hon. Friend became Secretary of State for Health, and I wish him well, genuinely and sincerely, despite the somewhat unfortunate circumstances. I praise him for some of the steps that he has taken. He has made positive progress in the short time that he has been Secretary of State.

I also extend greetings to the hon. Member for South Suffolk (Mr. Yeo) and his new team. We tangled many moons ago, and I wish him well in his work. I am sure that his background and experience means that we will have some excellent debates. I also extend good wishes to the hon. Member for Sutton and Cheam (Mr. Burstow), the new Liberal Democrat spokesman. He, too, has a good track record on health issues.

I begin with an apology to my right hon. Friend the Minister for Sport and Tourism, who has had to return from the rugby union world cup. I am pleased to say that he is in the Chamber. Having seen the quality of some of the matches, some of us think that we have done him a great favour in getting him back. He is well aware that Great Britain meets Australia in the third rugby league

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test on Saturday. At least the players in that code can string three passes together without dropping the ball, and they can also score the odd try.

In the limited time available to me, I want to make a few brief points about my concerns, and to repeat what I said when I intervened on my right hon. Friend in respect of the constitutional aspects of the handling of this matter. I think that he conceded that lessons should be learned from the way that the House has been bounced into a policy which, as everyone can see, has not been thought through properly. I welcome that.

I have been a member of the Labour party for almost 40 years—I know that I do not look that old. I have always been proud that the party has had democratic processes for policy development. Policies were discussed at branch and constituency level, and at conference. However, this policy was discussed at conference only this year, when a pretty clear decision was taken. I understand why the Lords should have some grievances about the way that the matter has been handled, as there has been no proper scrutiny in this House. No Green Paper or White Paper was published, and hon. Members have had no way to monitor the policy's likely effects apart from a brief inquiry conducted by the Health Committee.

I do not want to labour the point, but a number of Labour Members are aggrieved that the Bill has been able to pass through this House thanks only to the votes of hon. Members whose constituents will not be affected by foundation status. That concerns a lot of people, both in the House and outside it.

I want to repeat my key objections to the policy. I believe that it represents a return to a market ethos and to competition. We do not need to have this review; if we turn the clock back a few years, we can see exactly what happened under the internal market introduced by the Conservative Government. The same processes will be apparent and they will lead to there being winners and losers. Some Labour Members will support the Government's policy because they have hospitals that will apply for foundation status in their constituencies. They are not looking beyond their immediate areas and they are not considering the policy's effect on the wider NHS in their part of the world. That worries me.

The policy is a departure from the Government's previous aim—that the NHS should be primary care led. That policy direction was very successful. A weakness evident since the inception of the NHS is that we have allowed it to be dominated by the hospital sector, and by hospital consultants in particular. The Government were brave to move towards primary care trusts. If they were going to consider an innovation in respect of governance such as is set out in the Bill, the obvious place to start should have been at the level of PCTs. My hon. Friend the Member for Vauxhall (Kate Hoey) has made that point on several occasions. I am sorry that the Government have not done that.

I do not think that the governance elements have been thought through. I understand from questions that the Health Committee put to the Secretary of State and his

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officials a couple of weeks ago that the Government anticipate that the average trust will have about 10,000 members. I calculate that those 10,000 members will represent about one fiftieth of the patients within the remit of individual trusts. I do not regard that as democracy.

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