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Mr. Quentin Davies (Grantham and Stamford): We have got familiar over the past five or six years with the fact that we have an arrogant Government. They always have to have their way. If they do not, they get petulant and bad-tempered. I am afraid to say that the Minister behaved like that. In that petulance and bad temper, they forget, or show less than regard for, our constitution. He said that the other place had no right to turn down the Bill, but of course it has a right to do that. Our constitution and the Parliament Act are clear on that point. The other place is entitled to use its constitutional powers. If the Government wish to do so, they can use the Parliament Act in the next Session, but they have no grounds for such petulant resentment at the other place for simply fulfilling its constitutional mandate.

The substantive question is whether the House of Lords is right to take the view that it has. No one who has taken part in the debates on this matter today can be in any doubt that on this issue we need the other place

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to take a different view. At best this is an extremely muddled Bill, and at worst it is thoroughly dishonest. Its whole premise—as the Government introduced it—is that foundation hospitals can enjoy some real benefits by achieving that status, but other hospitals will not suffer any disadvantages. That is an implausible proposition to begin with, but it has been clearly exposed today as bogus. We have learned that from the financial point of view it will be a zero-sum game. If the foundation hospitals are able to raise more capital, it will be pound for pound at the expense of the capital available to hospitals that do not have that status.

Mr. Hutton indicated dissent.

Mr. Davies: The Minister of State shakes his head, but I doubt whether he will be brave enough to rise to contradict me. What I contend has been established beyond peradventure.

Another peculiar feature of the Government's propaganda on this subject is the claim that foundation hospitals somehow represent the recapture of hospitals for local democracy. In practice, all the powers will be drawn back into the bureaucracy by the regulator. Indeed, as the bureaucracy will determine which hospitals are allowed to become foundation hospitals, the Bill will increase centralisation, which is the exact opposite of the propaganda line. The Government have been disingenuous about the Bill.

The most dramatic revelation this afternoon was when the Secretary of State was forced to make concessions to his Back Benchers. He made contradictory and irreconcilable concessions to various groups in his own party. He told one group that if it did not like foundation hospitals, it should not worry because the Government would have a review after 12 months and possibly go back on the whole idea. However, he told another group—one that did not like the exclusivity of the concept—that all hospitals could become foundation trusts within four years. The Secretary of State does not seek to contradict me, and it is obvious that those two assurances contradict each other.

When incompatible, and I am tempted to say dishonest, promises are made on a Bill, it is important that the other place should take the opportunity to call a halt and say that we should not go ahead with it. Not only does the House of Lords have the constitutional right to take the view that it has, but it is clear from the way in which the muddle that the Government are in has been exposed by the debates today that the Lords are right. Thank heavens they have used their powers to ensure that the Government's contradictions and the Bill's shortcomings are laid bare. The House of Lords has done a great service to the country this evening. I hope that the other place will continue to stand firm and courageous, and send the Bill back again. If the Government have the courage of their convictions, they can use the Parliament Act in the next Session.

1.45 am

Kate Hoey (Vauxhall): I shall be brief. [Hon. Members: "Hear, hear."] Well, I may go on longer, if that is the attitude. The House of Lords has done what it has the right to do.

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If we do not like what the House of Lords is doing, we have to change the constitution, because the current constitution gives the Lords that right. To be frank, I am pleased that, apart from the provisions relating to foundation hospitals, the Lords have made several other amendments that improve the Bill.

In my view, the Bill has no credibility. It has no real support within the national health service or in the country. I cannot understand why Ministers in my Government are not listening to what people throughout the country are saying. Their handling of this issue has been extremely short-sighted. Already in my area, thousands of pounds have been spent on a consultation exercise, not on the principle, but on the detail. That that has happened—that the money has been spent before the proposal has even been passed by Parliament—is quite disgraceful. The money being spent now and that will be spent in future could have been added to the money that the Government are already putting into our national health service.

We have an excellent trust in Guy's and St Thomas's. Members of the board live in the community and forums bring in people from all parts of the community. At every consultation meeting that I have attended, I have not seen a single hand rise in favour of foundation trusts. We are doing something that has no support in the country, and the Government will rue the day if the Bill goes through tonight.

Sir George Young (North-West Hampshire): The hon. Member for Vauxhall (Kate Hoey) and the right hon. Member for Birkenhead (Mr. Field) have just had the courage to articulate reservations which we all know are widely shared by Labour Members. I hope that, even at this late stage in our debate, Labour Members will reflect on what those two Members have said. The first time we voted on this issue, the Government majority was 35; the second time, it was 17. At that rate of progress, the vote later on could be quite tight.

I say to the Minister of State, Department of Health, the right hon. Member for Barrow and Furness (Mr. Hutton), who opened the debate, the issue is not whether the Bill reaches the statute book, as he implied; the issue before the House now is whether the Bill reaches the statute book with part 1, or without it. All the other beneficial measures in the Bill will go on to the statute book if, in a few minutes' time, the House agrees with the Lords in their amendments.

Two issues that have run through the debate this afternoon and evening remain wholly unanswered by the Government. The first relates to funding. If a foundation trust successfully raises money privately and uses those resources to construct a building that would not otherwise have been built, the consequence will be that another hospital does not get a building that was in the Government's plans, because the overall public expenditure ceiling cannot be breached. Every single addition, every single success scored by a foundation hospital, will be compensated for by a failure by another hospital. It is no good the Secretary of State pointing at his head. He and the Minister of State have had debates this afternoon and this evening to answer that point, and neither has done so.

Hon. Members: Answer him!

The Secretary of State for Health (Dr. John Reid): I shall speak slowly, because even after three

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explanations, hon. Members obviously do not get it. It is quite easy for those who can do arithmetic. The envelope for capital expenditure is sufficiently big to contain all of the demands because, unlike the Conservatives, Labour is building up investment, not cutting it.

Sir George Young: With the greatest respect for the Secretary of State, I have to say that that does not answer the point that has been made time and again, for the following reason: he will never be able to get from the Treasury the totality of the money that he would like to spend on the NHS. If foundation hospitals were to be allowed to spend in addition to the provision made, there would be some advantage in their creation, but I repeat what I said a few moments ago: every success by a foundation trust will be matched by another building for a hospital that is not a foundation trust having to be dropped from the plans. That is the charge that the right hon. Gentleman has failed to answer throughout the debate.

The second point was touched upon by the hon. Member for Vauxhall. The Secretary of State wants to make services more responsive to the needs of patients. We agree with that. However, he has democratised the wrong body. It is not hospitals that determine the shape or the volume of services that are consumed. It is the primary care trust that commissions the services from the hospitals. If the right hon. Gentleman wanted to make the NHS more responsive to local needs, he should have applied his corporate government measures to the primary care trust, not to the hospitals.

Some Labour Members are cautious about voting with the Opposition. I have voted with Oppositions in previous Parliaments when there were Conservative Governments. If a Government Member thinks that it is right to vote with the Opposition because he or she believes that the amendment under question is right, he or she should do so. It seems to be perverse to rebel if it is thought that there is no chance of success, but to pull back on the one occasion when there is a real prospect of making a change. I understand that Labour Members have cover from their party conference if they want to vote in favour of the Lords amendment.

If Labour Members want a satisfactory resolution—if they want all the measures in the Bill to reach the statute book but not part 1—they should vote with the Opposition. They know in their hearts that that is the right thing to do, and they should not listen to the bullying from the Secretary of State.

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