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Mr. McCabe: I hear my hon. Friend, and I have had the benefit of her running commentary for the past hour and a half. I hope that everyone else will get to hear at least some of her views in the course of the debate.

The Bill will give local people, patients, staff and partnership organisations a real chance to have a say in the setting and the direction of the trust. That seems to me the right thing to do. It is a small step, in my judgment, towards a less bureaucratic, costly and centralised health service, which is the right thing for us to do. Contrary to the views of the hon. Member for Sutton and Cheam (Mr. Burstow), the proposals, for the very first time, put a cap on private work.

I recognise that there are concerns and that people are anxious. My point, however, is that we do not have a uniform health service now—anyone who believes that we do is kidding themselves. What we are trying to do is provide a little bit of autonomy as an attempt to move forward. We are building in safeguards: the Bill demands safeguards on partnership and sets out a duty of co-operation. The fears that some people have are exaggerated. My fear is simply this: every Labour Member who goes through the Lobby with the Leader of the Opposition tonight is pandering to the Conservatives. Every ex-Minister on the Labour Benches who demanded loyalty and support when they were holding their ministerial portfolio should think about why it is so difficult for them to show some loyalty in return tonight.

Mrs. Mahon: The hon. Gentleman voted a different way from me on the war in Iraq, and he went through the Lobby shoulder to shoulder with Conservative Members.

Mr. McCabe: My hon. Friend is absolutely right. On the issue of Iraq, I was not aware that we were actually discussing the future of the health service. On the issue of Iraq, there were cross-party positions in the House. My point is that there is a clear Conservative agenda to

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run down and denigrate the health service and to prevent modernisation and reform, because that is a precondition of the Opposition's policies.

Dr. Desmond Turner: May I remind my hon. Friend that there is also a very clear Labour agenda on the national health service? It was expressed by our party conference, and it is not foundation hospitals.

4.30 pm

Mr. McCabe: I should point out to my hon. Friend that I was also at the conference and I remember the constituency vote.

Mr. Jon Owen Jones: On the subject of marching shoulder to shoulder with the Tory party, I for one did not vote with Opposition Members on Iraq. However, I think that they have learned a lesson. Had they behaved on the issue of war with Iraq in the way that they are doing now, they would have defeated this side. They have learned that lesson, and they are putting it into practice now.

Mr. McCabe: Most people will recognise that that is absolutely the case. I simply make the point that there are people here who rightly expected loyalty when they held ministerial portfolios. I respect people's views and I accept that some people hold different views from me.

Clare Short: Will my hon. Friend give way?

Mr. McCabe: How could I refuse?

Clare Short: Labour has a big majority in the House of Commons, and I never asked anyone in our party for blind loyalty. I wanted to listen to them and for us to act together according to our values. That is what we should do today.

Mr. McCabe: I should make it clear that I have enormous personal respect for my right hon. Friend. If she has changed her view on this matter, I respect that. However, on the last vote, she did not vote for the policy because she was confused about the time of the vote, not because she was against the policy. That is the position, and I have to make it clear to her.

Clare Short: On a point of order, Mr. Deputy Speaker. I am sure that my hon. Friend would not want to mislead the House. I voted against this matter when it was last before the House.

Mr. Deputy Speaker: That is, no doubt, a matter of record for the House.

Mr. McCabe: I am very grateful for that correction. I was simply referring to my right hon. Friend's quotation in the newspaper. I might have the wrong quotation, but I recollect that we voted once on the matter on Second Reading, but there we go.

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My point is that we have a choice, but if we go through the Lobby with the Leader of the Opposition, we shall be doing so with a man who has described the NHS and the people who work in it as a Stalinist creation. That is what he thinks about it; that is what the Conservatives believe in. I do not want any part of that.

Mr. Kenneth Clarke (Rushcliffe): I must admit that I had some hopes of the new Secretary of State when he took over his responsibilities. I thought that he would continue in the direction of reform and modernisation that has just been welcomed by the hon. Member for Birmingham, Hall Green (Mr. McCabe). Since the Labour party first came to office—after a rather regrettable two years of reaction under the right hon. Member for Holborn and St. Pancras (Mr. Dobson), of which he is proud—it has moved steadily in the direction of combining finance for the health service with radical reform. I thought that the Secretary of State might take that forward.

It is therefore a matter of considerable regret that, at a comparatively early stage in the Secretary of State's period of office, he has got himself into a terrible mess on the agenda of reform. He finds himself in a difficult debate before the House, defending a dog's breakfast that seems to have brought against it an amazing combination of opponents. It is not often that the hon. Member for Wakefield (Mr. Hinchliffe) and myself are on the same side in a health debate, but we both think that what the Secretary of State has produced is nonsense and that he should go away and think about it again.

Let me assure the Secretary of State and the hon. Member for Wakefield that I remain totally committed to the idea of a free national health service that is based on equal access to treatment for all patients and financed largely out of taxation, and I will not waiver from that. For more than 20 years, I have been accused, as has my party, of having a secret agenda to undermine that, but our entire period of office demonstrated that we never moved one iota in that direction. I will be bitterly opposed to any suggestion that we should move in that direction now. I do not believe that we will.

The principles underlying reform should unite certainly those on both Front Benches in this House. We all now profess a belief in patient choice. Far be it from us to dwell on the bitter opposition to that proposition that the Labour party used to evince. We all propound the benefits of diversity of provision of health care from the public, private and voluntary sectors. I echo what my hon. Friend the Member for South Suffolk (Mr. Yeo) said, as I was the Minister of State who saved Tadworth Court and allowed it to go the private trust. It is a demonstration of how what was described as a failed hospital has now become a beacon of excellence because of the way in which an independent trust was able to develop it. We actually believe that with properly directed patient choice, a certain amount of competition among providers will lead to improvements to the quality and efficiency of the service.

Foundation hospitals could have marked a considerable step forward, and at times I thought that they would. I regret that I have not looked up my voting record but I think that I abstained when the measure

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came before the House in July. I shall not speak for my hon. Friend the Member for South Cambridgeshire (Mr. Lansley), who I am glad to say is our new shadow spokesman on health, but I suspect that he would have been considerably embarrassed if the Government had introduced measures to give effect to the local independence, liberalisation of the service and decentralisation that the Secretary of State said formed such a key part of his proposals. In fact, however, the Government have not persuaded people who believe in those things.

Many Members of the House of Lords would have moved in favour of the Government if they had delivered on what appeared to be the objectives of foundation hospitals. They would lose many Conservative opponents today—they might lose the lot of us—if they introduced genuine decentralisation for foundation hospitals, because we would support them. However, they have made half-baked concessions to the Labour Members who have been intervening on speeches for the past two hours, so they have wound up with the worst of all possible worlds. The Bill will not create an important new type of institution with the ability to exercise more local control in the service. It will create a body with a strange construction that will be even sillier than Network Rail, which is a precedent for the non-profit-making and accountable bodies to which the Labour party seems to be converted. The Government have not satisfied the dinosaurs who want to go back to the old NHS, and they certainly have not satisfied sensible reformers here, in another place, or in bodies such as the King's Fund, which is totally non-political and would certainly support any sensible modernising agenda.

Other hon. Members want to speak and share my frustration, so let me say why the Government have failed to win support and why I am convinced that the measure must be opposed. We must consider the role of the regulator. The Bill is covered with the regulator's constraints over the powers of new foundation hospitals. The regulator will have considerable control over their borrowing. I have some sympathy with the previous Secretary of State, the right hon. Member for Darlington (Mr. Milburn), who first introduced proposals for foundation hospitals. He lost the same battle with the Treasury that I lost when I was planning the precursors of NHS trusts. I wanted the most successful parts of the service to have the freedom to borrow and raise capital so that they could respond to rising demand. The Treasury turned me down. When I got to the Treasury, as Chancellor, I found that the Government were so battered over reform that no one wanted to change the system any more, so I was not able to reverse the decision. [Interruption.] The Labour party was accusing us of privatisation at the time, so my successor as Secretary of State for Health did not dare say that hospitals should be allowed to go to the private markets, because the present Secretary of State would have been in the vanguard with the hon. Member for Wakefield saying how dreadful it would be to privatise the service in such a way if that had happened.

The right hon. Member for Darlington had a go, but he failed. If hon. Members look at the way in which the new foundation hospitals will be constrained when

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raising capital, they will see that the situation is a complete nonsense that is made worse by the fact that when they get approval to borrow and make capital investment, it will be at the expense of the rest of the national health service. That point has been repeated by hon. Members on both sides of the Chamber, but the Secretary of State has not responded to it.

The cap on income from private practice is reminiscent of Barbara Castle. I cannot understand why on earth NHS hospitals should not be allowed to raise more income by attracting private practice and why doctors who carry out such practice should not do that in the NHS hospitals in which they work—it is a ridiculous constraint.

After listening to the debate, I do not understand quite how constrained the hospitals will be by national pay agreements. It seems that if a left-wing Member makes an intervention, the House is assured that hospitals will be bound by "Agenda for Change" and national pay terms and conditions, but if a Conservative or Liberal Member makes an intervention, there is a suggestion that they may move away from that a little. The NHS should not be in a straitjacket of national terms for pay and conditions regardless of regional and local needs. The management of the service would be improved if foundation hospitals had more discretion.

I do not have time to deal in detail with the elected boards of governors, but they are an appalling idea. With a membership that has yet to be defined, they will be elected on a tiny turnout. They may be dominated by the trade unions, or the membership will vote for local party politicians or various special interest groups, such as pro-life groups. That is not democracy. It is a ridiculous way to establish a system of governance for a local service.

I agree with those who say that we are too obsessed with hospital management. The commissioning side of the service—

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