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Lord Brabazon of Tara: My Lords, the Minister says that it is the Government's ambition to get more passengers travelling on the railways. Does she not agree that privatisation is achieving just that, with passenger journeys up by 7.5 per cent. since privatisation, some companies reporting an increase of 15 per cent.; freight up by 15 per cent.; 29,000 more

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trains in the timetable this winter compared with last winter; and over 2,000 new coach and rolling stock orders? Railtrack is set to invest £10 billion in the next 10 years. Has not privatisation achieved exactly what the Government want?

Baroness Hayman: My Lords, as I have pointed out to the House previously, considering the amount of public subsidy going into the privatised services we would expect to see some improvements. In fact, we see a great diminution of service, as experienced by many Members of your Lordships' House and the travelling public. It never ceases to amaze me that noble Lords opposite seem to consider that privatisation has been such a huge success when the experience of thousands of travellers says exactly the opposite.

Lord Barnett: My Lords, may I declare an interest, having travelled on the north-west rail route for over 30 years, man and boy? May I invite my noble friend to inform the shadow Minister that if he travelled on the north-west route he would learn something about how privatisation works in practice? May I also ask my noble friend to invite Richard Branson to take time off from flying around the world in a balloon to try travelling on the north-west route? It might improve.

Baroness Hayman: My Lords, I am not sure about extending invitations to Mr. Branson, given current circumstances. My noble friend illustrates the point I was making earlier to my noble friend Lord Cledwyn. People in many areas are concerned about the quality of their rail service. Comments such as we have just heard are often made about Virgin Trains.

Lord Methuen: My Lords, is the Minister aware that Midland Main Line has now "improved" its service to such an extent that one cannot use a first-class ticket on its trains? One needs either a premium-class ticket, which includes food, or a business-class ticket. Parliamentarians are unable to use that because it is necessary to book a return seat and we cannot know on which train we are able to travel. That is not very helpful.

Baroness Hayman: My Lords, I note the comments of the noble Lord. I was not aware of those particular benefits of privatisation, as the noble Lord, Lord Brabazon, would categorise them. Once again they illustrate that everything is far from perfect in the privatised rail industry.

EMU and Pension Liabilities

3 p.m.

The Earl of Clanwilliam asked Her Majesty's Government:

    Whether they accept the International Monetary Fund Report No. 147 of December 1996 estimating the following net pension liabilities as a proportion of debt to GDP: of Germany as 110.7 per cent.; of France as 113.6 per cent.; of Italy as 75.5 per cent.;

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    and of the United Kingdom as 4.6 per cent.; and whether these liabilities have changed since the date of the report in relation to the convergence criterion that debt should be limited to 60 per cent. of GDP.

Lord McIntosh of Haringey: My Lords, the IMF figures are based on a number of assumptions concerning pension entitlements, contribution rates, long-term demographic and economic trends, and discount rates. Nevertheless, they provide useful information about future pension liabilities. I can confirm that the figures quoted in the Question are the IMF's latest estimate of net pension liabilities. The convergence criterion set out in the Maastricht Treaty is defined in terms of existing debt. It does not take account of future liabilities such as pensions.

The Earl of Clanwilliam: My Lords, I thank the noble Lord for his interesting reply. An existing debt must be paid even though it will arise in future. Does the noble Lord agree that, in the event that EMU is achieved on time, as is likely, and there is not proper convergence, there will be irreconcilable conflicts throughout the Union?

Lord McIntosh of Haringey: My Lords, the noble Earl asked me a similar question at the end of November last year. My answer was the same as the one I have just given. These future liabilities are not part of the Maastricht criteria, but potential future liabilities are covered by the stability pact and the requirement that member states in EMU should continue to restrain their deficits.

Lord Shore of Stepney: My Lords, does my noble friend agree that it is strange to exclude pension liabilities from the calculation of debt to GDP? Does he agree that an even more intriguing question is what has happened to the 60 per cent. of GDP to debt ratio? Am I right in thinking that, if that were applied to the present applicants, Italy and Belgium would be immediately excluded since their debt ratios to GDP are over 100? What is the Government's attitude? What approach will they take when they come to consider eligibility for membership in two or three months' time?

Lord McIntosh of Haringey: My Lords, in response to the first comment of my noble friend, there is no distinction between future potential liabilities for pensions and any other future liabilities. The Maastricht criterion is concerned with existing debt and no particular distinction is made for pensions. In answer to my noble friend's question, during the UK presidency we shall take a constructive attitude to ensure that the criteria are observed and that EMU proceeds successfully.

Lord Marsh: My Lords, does the noble Lord agree that the main problem is not just the question of future debt--which must be met at some time--but the fundamentally different approach of some of our Continental partners to social expenditure? Does the noble Lord agree that it is that which makes it almost impossible to believe that convergence is easily achievable?

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Lord McIntosh of Haringey: My Lords, it is certainly true that, if and when future liabilities arise, they will have to be dealt with within the deficit procedure provided by the stability pact. But there are many other examples of differences between social policies and how they are funded in European countries, and it is not a requirement of EMU that they should all be pasteurised, so to speak.

Lord Boardman: My Lords, does the Minister's earlier answer imply that these liabilities do not include pensions now accruing and not being paid, or are they limited, as he suggested, only to pensions which are now being paid? If it is the latter, does he agree that the extent of the difficulty of convergence is even greater than the Question suggests?

Lord McIntosh of Haringey: My Lords, the future liabilities are for pensions which have not been funded. My instinctive reaction--I shall write to the noble Lord on the matter--is that that applies whether or not pension payment has already started.

Lord Bruce of Donington: My Lords, can my noble friend confirm that it is the intention of Her Majesty's Government to adhere strictly to the provisions of Articles 5 and 6 of the Maastricht Treaty, which lay down the specific figures? Can my noble friend also indicate whether or not he has received representations from the Commission at this stage to vary those conditions? Such an event is provided for in Article 104c of the treaty and requires the unanimous support of all member states on a proposal from the Commission to vary the terms set out in Articles 5 and 6. Will my noble friend also bear in mind as a final caution that the statistical basis on which these matters are determined is specifically stated to be the business of the Commission?

Lord McIntosh of Haringey: My Lords, I do not believe for a moment that that is my noble friend's final caution. The UK during its presidency will do its duty which is to secure the successful implementation of economic and monetary union. I am not aware that there has been any formal request for variation of the Maastricht convergence criteria.

Business of the House: Debate this Day

3.6 p.m.

The Lord Privy Seal (Lord Richard): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the debate on the Motion in the name of the Lord Hunt of Kings Heath set down for today shall be limited to five hours.--(Lord Richard.)

On Question, Motion agreed to.

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The National Health Service

3.7 p.m.

Lord Hunt of Kings Heath rose to call attention to the celebration in 1998 of the 50th anniversary of the National Health Service and to acknowledge the contribution it has made to the health of the nation; and to move for Papers.

The noble Lord said: My Lords, I begin by declaring an interest as someone who has worked in and on behalf of the National Health Service for 25 years. I am also an adviser to the NHS Executive on the 50th anniversary of the NHS. I am deeply privileged to be able to move this Motion on what must be regarded as one of the most notable endeavours upon which this country has ever embarked: our National Health Service. I believe that that is reflected by the distinguished and long list of noble Lords who will take part in the debate this afternoon.

I particularly welcome the decision of the noble Baroness, Lady Knight of Collingtree, to make her maiden speech today. I have first-hand experience of her affection for and knowledge of the National Health Service. I await her contribution with keen interest.

On 5th July 1948 the NHS came into being. In introducing the NHS to the nation Aneurin Bevan promised that it would lift the shadow of fear of the financial consequences of illness from millions of people. He promised that it would relieve suffering, provide a higher standard of practice from the medical profession and make a great contribution to the wellbeing of the people of this country. How well the NHS has fulfilled the expectations of its founder. Despite the doubts, of which there were many, and a great deal of opposition and obstruction, the NHS has proved to be one of the outstanding creations of this country this century. Yet its inheritance in 1948 was hardly of the best, with little extra money to begin with and no extra nurses or doctors. It had an unplanned and patchy system of hospital provision. There was no comprehensive building programme for new hospitals. Often GP services were demoralised. Local authorities struggled to provide services outside hospitals and in the community.

Yet look at what has been achieved from that rocky inheritance. We see the modernisation of general practice to the extent that it must be regarded as the finest primary care system in the world. We have seen many new hospitals built and the planning and co-ordination of services from primary care to secondary care to tertiary care which is the envy of many health care systems. We have had outstanding success in meeting the challenge of advancing technology and new drugs. We have upgraded our treatment, raised productivity, and yet hardly increased our spending as a proportion of national output. We have retained the loyalty and commitment of our workforce. How many other organisations in this country would like to have the commitment that we have received from our staff?

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Volunteers in their thousands have contributed to the NHS. We have received the support of the British people. Above all, we have shown that a publicly financed and publicly provided NHS can stand comparison with any healthcare system in the world.

There is much to celebrate. I have been privileged to be a member of a national steering committee, chaired by Professor Michael Schofield, which has put together the activities that will take place over the next few months to celebrate the 50th anniversary of the NHS. It has been remarkable that organisations which may traditionally have fought with one another over the NHS have all sat together: the BMA, UNISON, the RCN, the Royal colleges, and managers. It has been a wonderful experience of seeing people pull together. It is a living example of the uniqueness of the NHS family when it works together.

Hundreds of activities will take place throughout the country. At local level there will be open days, exhibitions and debates. They will be underpinned by national events. A postage stamp is to be published. There will be an ideal health exhibition, many debates, and photographic exhibitions of life in the health service going back to 1948, culminating in a service of celebration in Westminster Abbey on 3rd July.

It is always tempting to look back and to celebrate the achievements of the NHS, but I believe that we should use the 50th anniversary to look forward, and to discuss how the NHS can retain the vitality, relevance and ability to provide a comprehensive health service for the nation for a further 50 years.

No one should underestimate the challenge that we face. In that we are not alone. All healthcare systems in the developed world--in Europe, America or Asia--to a lesser or greater extent face the challenge described by Sir Cyril Chantler as the three paradoxes of medicine: the first is that as medicine becomes more successful in diagnosing, understanding and treating disease, so the capacity to do all three appears increasingly inadequate. The second paradox is that as countries become richer their ability to afford good quality care for all their citizens appears to diminish. The third paradox is that, as people live longer, the burden of illness and disability often appears to increase.

So far the NHS has responded well, and better than most, to those challenges, but there is no room for complacency. The NHS has to tackle a number of key issues. Despite its overall cost-effectiveness, there is an enormous variation in performance between different hospitals, different parts of the country and different doctors. We must iron out those variations and pull the poorest performers nearer to the level of the best.

Quality assurance programmes have been patchy. In some hospitals, where all the doctors are enthusiastic supporters of clinical audit, people have got together to drive up standards and improve patient care. In some hospitals only a few doctors are prepared to put their energies into that. That is a great failing which needs to be addressed. Many doctors are still disengaged from the management of their organisation and the overall leadership that needs to be given.

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Staff morale has to be tackled. We owe much to our staff. We cannot ignore the stresses and strains many of them face as the number of patients we treat increases day by day, year by year. We have not been as helpful to and supportive of our staff faced with such stressful situations. Finally there is the great challenge of the modernisation of the health service. The health service is littered with proposals for modernisation which have fallen because of its failure to obtain support from its local community. Unless it has support from the local community, it is difficult to modernise and bring up to date the health service as we would wish.

What is so striking--and I am convinced that this will be history's verdict--is that the 1991 reforms attempted, but failed, to meet those challenges. What is equally striking is the high cost of those changes, which culminated in millions of pounds of debt, which the new government inherited. The notion of competition between hospitals, between doctors and between nurses puts at risk the teamwork approach which has always been a major strength of the health service. The bureaucracy, the billing, the paper chase of millions of invoices put at risk the motivation of professionals in the health service. The unfairness of fundholding puts at risk the equitable basis from which the NHS has always derived so much strength. The macho management and secrecy culture put at risk the public service ethos which has meant so much to the health service since 1948.

We are now entering a new chapter; a new White Paper; and a new reorganisation. It is one with a crucial difference. Unlike so many previous reorganisations, this one has within it the seeds of fundamental change. First, it removes competition, bureaucracy, and unfairness, and restores a co-operative ethos. Important in itself, but more than that, with the White Paper and the forthcoming Green Paper on public health, we have a serious, cohesive and sustainable agenda for many years to come.

The key elements in that agenda are, first, national leadership. The health service is not a loose collection of 500 trusts and 100 health authorities. It needs to be treated as one national service, with national strategic leadership from the centre. That must be parallelled by the same decisive leadership at local level. That is where the health improvement programmes, to be set by health authorities, embracing public health measures and improvements to healthcare service, are so important. They are to be underpinned by a duty of partnership among everyone within that local healthcare system.

The White Paper sets the foundation for much greater professional leadership from doctors and nurses in the organisations for which they work. What is important is that that leadership is to be provided within a much stronger concept of accountability. Primary care is to be given the lead role, again, fairly, and with due accountability to Parliament and the public. This new system will help to improve the quality of our health service. The development of national agencies such as the National Institute for Clinical Excellence or the Commission for Health Improvement, the concept of clinical governance within individual trusts, and the personal accountability of a chief executive of each trust

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to ensure that proper clinical governance is carried out are important improvements to the way in which we will drive up quality in our health service.

Above all, the White Paper lays the foundation for giving much greater support to our staff through training, development and better occupational health, in the stressful situations in which they often find themselves. That is not easy. The agenda is tough. There are issues relating to the willingness of doctors and nurses to accept the leadership role that they are being given; issues involving managerial capacity to handle such momentous changes; and issues about the pace of change. This is not a reorganisation for two years; it is a reorganisation for 10 years.

I sense in the NHS both optimism and acknowledgement that this is the right direction in which to go. Above all, I believe that it is the best possible answer to those who say that the NHS is unsustainable in the long term and argue that the impact of demography--the elderly population--new techniques and scientific advances are producing a wide gap between what the NHS would like to do and what it can afford to do. That way lies defeat. Its only end point is a retreat from providing a comprehensive service to providing a safety net service for the poor and needy. That must not happen; nor will it happen.

Life is not easy in the National Health Service; there are many pressures, difficult choices to be made and difficult priorities to be set. But what is new? We have faced those issues since 1948 and we have come through. I suggest that the history of the NHS is a signal for optimism about the future. Instead of fearing and retreating from the onward march of science and technology, let us welcome and embrace it. As Aneurin Bevan said, the service must always be changing, growing and improving.

There is an exciting, almost unlimited potential for the service in the future. Let us now plan the direction, development and resources to offer a world class service to the people of this country. In 1948, the NHS was born to banish fear and to provide a comprehensive service to our nation. It has done that and 50 years on our nation still wants its National Health Service. Let us now embrace change, new medicines and scientific advances. Let us embark with enthusiasm on providing better services and better results from treatment. Above all, let us remain true to the ideals of Aneurin Bevan and to all those who have supported, served and participated in our National Health Service. I beg to move for Papers.

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