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Lord Mackay of Ardbrecknish: My Lords, before the Minister leaves that point, perhaps I may ask why Part II is in the Bill at all. Before the Bill becomes law, in 88 days a Scottish Parliament will be elected. Two months later it will be entirely responsible for health.

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Surely, the right and proper course would have been to leave these important matters to be discussed and decided by the Scottish Parliament later this year.

Baroness Hayman: My Lords, I believe that the right and proper course was to ensure that progress on the White Paper in Scotland was not impeded by further delay. It was well received and there is a desire both north and south of the Border to take forward the important issues of quality and professional self-regulation, an issue which is reserved for the UK Parliament. Progress can then be made in Scotland as well as in England and Wales.

Lord Ewing of Kirkford: My Lords, I am grateful to my noble friend for giving way. Is not the position that the new acute and primary care trusts in Scotland come into operation on 1st April? The Government need legislation to abolish the existing trusts and to set up the new trusts, otherwise they would be subject to legal challenge. I am absolutely astonished that a former Conservative Health Minister does not even begin to understand that point of view.

Baroness Hayman: My Lords, my noble friend has detailed knowledge and experience of the work of the health service in Scotland. Perhaps I may return to the provisions which will apply only to Scotland. Many of them are similar to Part I of the Bill applying to England and Wales, but there are also differences in the proposals for primary care and the quality agenda is being tackled differently. The distinctive approach in Scotland recognises the different history and starting points north and south of the Border while maintaining the coherence of a National Health Service across the United Kingdom, which I am sure noble Lords in all parts of the House will wish to see preserved.

I turn to the detail of primary care and deal first with fundholding. Primary care groups and trusts build on the work of multifunds, GP commissioning groups, individual fundholders and total purchasing pilots. They develop the potential of primary care commissioning, but without the disadvantages of individual fundholding which has been a bureaucratic and costly system, has allowed service development to take place in a fragmented way, has artificially separated responsibility for emergency and elective care, and has given advantage to some patients at the expense of others.

We are therefore ending standard and community fundholding on 31st March this year, through regulations which were laid yesterday. A much reduced residual scheme will then operate until Sections 14 to 17 of the National Health Service and Community Care Act 1990 are repealed at the earliest opportunity after Royal Assent by Clauses 1 and 36 of the Bill.

I turn to the new arrangements. Primary care groups and local health groups in Wales will be responsible for improving the health of their local communities, commissioning an increasing range of services, including emergency as well as elective care, and developing high quality primary care services. They will cut bureaucracy, and for the first time in the history of the NHS the primary care professionals who do the

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majority of prescribing, referring and treating will come together to ensure the best use of resources to benefit patients.

Primary care trusts take the primary care group model further. They will be freestanding statutory bodies, with additional freedoms and responsibilities. They will be able to employ staff and own property and they will have rights and liabilities. They may also become providers of healthcare, a function currently performed by NHS trusts, allowing the integration of primary and community health services in a way that has never before been possible.

These freedoms will give local clinicians opportunities to innovate and transform services, extending choice and convenience for patients, for example, through more use of convenient day surgery in health centres close to home; joined up healthcare offering treatment, advice, physiotherapy and chiropody all on the same site; and wider health partnerships with GPs teaming up with dentists, opticians and pharmacists to provide a complete package of health services from one complex.

Lord Morris of Manchester: My Lords, my noble friend has referred to chiropody. As she knows, the Society of Chiropodists and Podiatrists is concerned that the Bill lacks specific mention of protection of titles and any definition of the future regulatory regime. The society believes clarification on both to be necessary if the Government are to achieve their aim of professional self-regulation. What can she say to reassure them?

Baroness Hayman: My Lords, I know of my noble friend's association and interest with the Society of Chiropodists. When I come to the subject of professional self-regulation, I shall pick up some of the points that he has made, which I know are of concern. I hope that those concerns can be allayed.

Many primary care groups are keen to take the steps to trust status. A large number have already expressed interest, and we hope to establish the first PCTs by April 2000. The Bill will enable us to meet that demand.

I was surprised to see the reasoned amendment tabled yesterday by the noble Earl, Lord Howe. We have approached the drafting of these provisions with two simple goals: first, to allow flexibility for primary care trusts to evolve in the light of experience; and, secondly, to integrate primary care trusts firmly within the existing system of NHS law. Primary care trusts will receive most of their functions from health authorities. These functions are mainly provided under Part I of the 1977 Act. This has a very flexible structure. The functions for health authorities are currently set up in secondary legislation. We are simply mirroring that approach. If the noble Earl looks back to his own Government's 1990 Act he will see that the functions of the NHS trusts were set out in a way similar to the approach we are taking for primary care trusts in Clause 4 and in a lengthy Schedule 1.

Obviously, the Delegated Powers and Deregulation Committee will consider our approach and we shall look carefully at its comments and recommendations.

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However, I am confident that the Bill sets out a practical and wholly appropriate legislative framework for taking on this task.

I turn to raising the standards of quality in NHS care, which are at the heart of the Government's drive to modernise the NHS. All patients who are treated on the NHS want to know that they can rely on receiving high quality, safe, and effective care when they need it. And, overwhelmingly, they do receive it. We recognise that there is much good practice to build on. But there have also been some serious lapses, and when they have occurred they have harmed individual patients and dented public confidence. New and systematic action is needed to raise standards and ensure that high quality care is provided consistently.

In July we set out a package of clear and coherent proposals in the consultation document A First Class Service, and these have been warmly supported. Our quality programme comprises three strands: setting the national framework; ensuring systematic local delivery; and monitoring to ensure that the standards of quality we all want are being met. We are making real headway in implementing these. In parallel with the Bill we have laid regulations to set up the national institute for clinical excellence as a special health authority, and our first national service frameworks will be published this spring.

The Health Bill contains a number of key provisions in this area. Clauses 14 to 17 and Schedule 2 will establish a new external body, the commission for health improvement, to provide independent expertise to strengthen NHS action to assure and improve quality and tackle local service problems. The commission will be an independent England and Wales NDPB, at arms' length from but accountable to the Secretary of State in England and the Assembly in Wales. There are separate arrangements in Scotland which are also designed to help monitor and ensure quality standards.

The commission will support the development of clinical governance in a way that sustains and improves the quality of services, and ensures that fewer problems occur in future. Where local efforts are unable to make a difference in tackling serious problems, the commission will provide the NHS with access to the skills and expertise needed for rapid action to put those right.

One of the areas of the Bill which I am certain will be of particular interest in your Lordships' House and indeed to which reference was made in our debate last Wednesday on the State of the National Health Service is the subject of professional self-regulation--an issue raised by my noble friend Lord Morris of Manchester.

We have been exploring with the professions the regulatory bodies and others how best to modernise and strengthen the existing systems of professional self-regulation to ensure that they are more open, responsive and publicly accountable. Patients need the assurance that the people to whom they are entrusting their care have been properly trained and continue to maintain high standards. But recent events have dented public confidence. The professions recognised and are responding to this, and have made a wide range of proposals to update their legislation.

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The systems of self-regulation are set out in a number of separate Acts. These make provision which, with very few exceptions, may be changed only by means of primary legislation. The Government are constantly being asked by the professions to make such changes. But there is little prospect in the congested parliamentary timetable to find time to make these changes if a new Bill is required each time. To break the logjam we have concluded that we should take a power, set out in Clause 47 and Schedule 3, to enable existing regulatory systems to be modified and new professions regulated by order.

The Government have discussed the detail of the measures with the professions, and continues to do so. We have been driven by three main considerations. First, it is vital that we find a way not only of tackling the backlog of amendments to a number of Acts, but also a way of making substantial changes to meet the clearly articulated aspirations of the Professions Allied to Medicine; and also a number of professions that are currently unregulated by statute.

Perhaps I can say to my noble friend Lord Morris of Manchester that the question of title, which is one of the matters that is important to the professions, is covered in paragraph 1(d) of Schedule 3 and there is a clearly laid out framework on the face of the Bill which provides safeguards as to what the power can and cannot be used for. Perhaps I can come to that in a moment.

I turn now to nurses, midwives and health visitors. I know that for them one of the frustrations in approaching these issues has been that the Government have been in the process of considering the review of the Act governing their self-regulation. I am pleased to announce today the publication of the independent review of the Nurse, Midwives and Health Visitors Act, which recommends new legislation to replace the current arrangements. The new arrangements will be designed to acknowledge and strengthen the accountability of practitioners; strengthen the involvement of users and employers in the processes; and put public protection explicitly at the heart of regulation.

The report recommends, and we accept, that the current dual regulatory structure of a council and four national boards be replaced with a new UK-wide body, with ultimate responsibility for regulating the professions, but national arrangements may be made in respect of some functions previously carried out by the boards. The Government have, however, decided not to accept recommendations relating to health visitors, who will continue to be a separate profession. We shall be bringing forward an amendment to the Bill to repeal the current Act once the new arrangements are in place. A circular giving a more detailed response, and inviting views, will be issued later this week.

The second consideration in framing the order-making power is that we must also be clear what the power can and cannot be used for. We have sought to give categorical assurances to the regulatory bodies on a number of points on the face of the Bill. The schedule leaves no doubt that all matters that are central to self-regulation must remain with professional

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bodies--keeping the professional register, setting standards of eduction for entry into the profession, provision of guidance on standards of professional conduct and performance and fitness to practice procedures.

Thirdly, the power must clearly be subject to appropriate levels of parliamentary scrutiny through procedural safeguards, and we have specified on the face of the Bill requirements for consultation, publication of draft orders three months before they are laid, and affirmative procedure.

It is very much the Government's hope that we can work constructively and successfully in partnership with the professions on this issue. This power is not about dismantling self-regulation. We share the common aspiration to strengthen, not weaken, that self-regulation.

The third key strand of the Bill is partnership. Services need to be built around the needs of the people who use them, not the organisations which provide them. Too often the structural boundaries between services have been a major obstacle to getting the right services to the right people. In the discussion document, Partnership in Action, we set out our plans to make partnership a reality by updating existing systems, removing existing barriers and introducing new incentives for joint working. I am pleased to say that the warmth with which those proposals were received clearly shows that our plans go with the grain of what both the NHS and local authorities are seeking to achieve.

Clauses 19 to 25 contain a package of measures to put partnership working central stage. Clauses 19 and 20 provide updated and extended duties of co-operation covering all NHS bodies and their local government partners. These are backed by practical measures. Health improvement programmes will bring together all the local players to improve health and health services, and tackle inequalities. The Bill gives them statutory underpinning in Clause 21. It also provides in Clause 6 for new incentives for those health authorities which, with their local health partners, make greatest progress on this.

The Bill takes new powers to break down barriers, not just between health and social services, but between the NHS and wider local government, through greater flexibility over the transfer of funds and over operational arrangements such as pooled budgets, where this will best improve health. The Bill sets clear expectations for partnership working and offers local organisations and staff new ways to make this a reality, with scope to shape local arrangements round the needs of patients and communities.

These clauses set out a framework within which all local organisations--including, for instance, voluntary and patient organisations within the context of health improvement programmes--can work together to improve the health of local people. The new provisions will provide space for health services and local authorities to think more inventively; to develop innovative solutions to long-standing problems; and to use local resources in new and imaginative ways. They

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complement those in the Local Government Bill which will introduce the duty of best value for local authorities and enable the Government to remove obstacles to joint working.

Before I conclude I should outline a number of other important provisions in the Bill relating to NHS trusts, high security psychiatric services, the Pharmaceutical Price Regulation Scheme and fraud. Turning first to NHS trusts. Clauses 8 to 12 and 43 to 45 modernise the framework within which NHS trusts operate. The Bill leaves in place the devolved responsibility that trusts need to enable them and their staff to get the most out of NHS resources for their patients. But it sets this firmly within the context of trusts' role within the wider national health service.

Clauses 10 to 12 and 43 to 45 simplify the trust financial regime to reflect better the status of trusts as public sector organisations, rather than trying to imitate a commercial business structure. Aficionados of the NHS trust financial regime can find full details in the Explanatory Notes. Clauses 8 and 37 update the arrangements for trust establishment orders to give them greater flexibility when dealing with their estate.

Clause 34 fulfils our commitment in Modernising Mental Health Services to enable high security special hospitals to be constituted as NHS trusts, to promote better integration of secure provision.

I turn now to pharmaceuticals. We are committed to renegotiating the pharmaceutical price regulation scheme and are currently conducting negotiations with representatives of the industry. We consider that a voluntary scheme which is clear and fair is the best way of working, and this view is shared by the industry. But fairness has to mean that everyone complies with the agreement and companies in the same situation are treated in the same way.

Unfortunately, this is not thought to be the case with the current agreement. One major company has refused to submit financial returns since 1990 and resisted all approaches to comply. Over the past year 24 companies have increased product prices without the department's agreement, at an estimated cost to the NHS of £30 million. That is at the expense of other NHS treatment and care.

If action is not taken to secure compliance, there is a risk that the scale of losses will increase. It is the Government's duty to ensure that the NHS gets a fair deal. It also helps the pharmaceutical industry if everyone knows that there is a clear, fair and universally applied arrangement. In the long run, it makes it possible for the Government to run such matters with a much lighter touch.

The powers in Clauses 26 to 31 will enable the Government to ensure compliance with aspects of a new agreement which would be the result of full discussion with the industry. Perhaps I may use medical terminology here and say that we are talking about informed consent. So they will not significantly affect those companies committed to complying with the agreement, but they will secure compliance from any other companies. In the ongoing negotiations we are committed to finding a fair deal for the NHS and a fair

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deal for the pharmaceutical industry. We believe that it is possible to put in a place a system which delivers these objectives, and which ensures that this country continues to be in the forefront of research and development in this area.

Also included in the Bill are new powers to tackle fraud against the NHS by patients and family health service practitioners, to cut down exploitation by a small minority at the expense of the great majority of honest NHS patients and practitioners. We need to ensure that NHS resources are spent where they should be, on patient care. The new powers will help underpin the strategy set out in Countering Fraud in the NHS, published in December 1998.

This is an immensely important Bill. It will deliver the far-reaching changes that are necessary to underpin the development of the health service into the next century. I am sure that we shall have detailed discussions on its provisions in your Lordships' House. I look forward to them. I commend the Bill to the House.

Moved, That the Bill be now read a second time.--(Baroness Hayman.)

3.33 p.m.

Earl Howe rose to move, as an amendment to the Motion, That the Bill be now read a second time, at end to insert "but regrets that neither the definition of a Primary Care Trust nor any adequate provisions relating to the functions, powers, responsibilities and structure of such are contained in the Bill; and calls upon Her Majesty's Government to amend the Bill accordingly."

The noble Earl said: My Lords, the House will be grateful to the Minister for introducing the Bill with her usual clarity. We have before us a very radical Bill. It is a Bill that must surely qualify as the flagship of the Government's health reforms in the current Parliament. To the regret of all on these Benches, it is a Bill that seeks to undo much of the good resulting from the work of the previous administration. But that is not the only reason why we believe that this is a deeply flawed Bill. It is presented by the Minister as heralding bold, new initiatives designed to improve the quality of healthcare across the board, to eliminate unfairness and to pare down NHS bureaucracy. I wish it were that straightforward.

In my remarks today and at subsequent stages of the Bill, I shall seek to show it up in its true colours, as a measure that, far from providing a platform for improvement, will instead be a recipe for inflexibility, inefficiency, lack of choice and, perhaps above all, tight central control of our health service by politicians in Westminster.

The previous Conservative government introduced GP fundholding. This Government now want to abolish it. Why? The benefits and success of the fundholding system have been recognised by anyone who has ever had anything to do with it. Fundholding has given GPs greater financial and clinical autonomy and, in the process, enabled them to deliver a better standard of care to patients. Efficiency savings have been ploughed back

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into shorter waiting times, new specialist services, surgical procedures developed within the practice and improved surgeries and waiting rooms. It is not only Conservatives and fundholders who recognise that; even the Government's White Paper acknowledged that fundholding has enabled doctors to,

    "sharpen the responsiveness of hospital services and extend the range of services available in their own surgeries".
The British Medical Association, the Audit Commission and the Organisation for Economic Co-operation and Development have expressed similar opinions. The philosophy is simple: the greater the autonomy of a GP, the better the patient care; and the closer to patients that decisions are taken, the more effectively are GPs accountable to them.

At present about 60 per cent. of patients in the country are looked after by a fundholding practice, leaving 40 per cent. who are not. So, the system has to go. That is a funny sort of logic. It is a logic which should sound a warning bell in all our minds of something that the Labour Party all too often finds appealing: the idea that we should aspire to a levelling down of standards and not a levelling up.

What are we getting in place of fundholding? Primary care groups and, under the Bill, primary care trusts--PCGs and PCTs--representing the most fundamental upheaval in the family doctor service since the formation of the NHS. This is a point to note because it is precisely the reverse of what the Prime Minister promised us. In June 1996 the then Leader of the Opposition pledged to health service managers that,

    "there would be no great upheavals".
Those were his words.

But these reforms are, indeed, an upheaval. One manifestation of that is that they will coerce every single general practitioner into a primary care group. The Government have argued that there is no coercion and that PCGs will simply "cover" GPs rather in the manner of a health authority. How can that be a proper description of reality when doctors will have no choice as to whether they are part of a PCG and no choice as to whether and when they give up their budgets and their ability to commission healthcare services?

However, coercion is not the only problem. Of equal seriousness, contrary to all the Government's much vaunted aspirations, are the bureaucracy and inefficiency that look set to be an integral part of the new structure. The PCG/PCT structure is likely to be very costly to administer. Initial estimates vary from £150 million to over £300 million per year, without accounting for start-up costs. That is considerably more than the cost of fundholding and yet the Government have budgeted for savings. Indeed, they have earmarked the money for other purposes.

It is almost a dead certainty that any system that attempts to control the commissioning and budgetary functions of every single GP and involves the co-ordination of a multitude of different bodies and agencies will, by its very nature, be bureaucratic. However, even more disappointing is the prospect of complicated new mechanisms being built into the

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commissioning process that are bound to result in a health service that is actually less responsive to patient demand, not more.

Let us consider referrals, for example. Long-term service agreements with hospital trusts will dictate where referrals are to go. No longer will a GP be able to shop around for a hospital where waiting times are shorter or care is better. Let us suppose that a hospital consistently underperforms. If a PCT wants to place a new contract elsewhere, it will have to go through all manner of lengthy negotiation procedures with the trust and the health authority. No longer will a hospital feel that it has to be on its mettle at all times in case another hospital captures its business.

What of the GP's budget? There will be no incentive to generate savings at practice level because any efficiency gains will simply be swallowed up by less efficient practices in the same group. What about the creation of new services? The flexibility to create and organise them at local level will not lie with the GP or his practice as it can at the moment. Policies and decision-making will lie with the board of the PCG.

The Government want and expect many PCGs to move towards trust status but the ease with which they will be able to do so may ironically be diminished by their inability to operate at the levels of efficiency that many doctors will wish to attain. The result could be exactly the opposite of what the Government intend.

All that is in the supposed interest of fairness. But when we look at how PCGs are to be organised, we find another irony. We find four possible grades of PCG. Some will be without much autonomy and provide fewer services, while others will have more autonomy and provide more services. It is difficult to take the Government's criticism of two-tier care seriously when what they are creating is a structure that will by its very essence deliver four possible tiers of care, with the quality of that care determined by postcode.

These major reforms have been in gestation for 21 months. The White Paper "The New NHS" appeared more than one year ago. The flagship of the Government's programme of reform in primary care is the creation of the primary care trust, and intended to occupy the highest tier of the ladder in its ability to provide and commission health services right across primary and secondary care and into the community health sector.

Those trusts will control budgets of £60 million or more and involve doctors, nurses, hospitals, local authorities, voluntary groups and many others in the delivery of services. Throughout the Bill, references to primary care trusts abound--not least in the clauses dealing with the duty of quality, the duty of partnership and the commission for health improvement. Yet when we look for a definition of a primary care trust, we find nothing. There is no definition of this new, all-seeing, all-singing, all-dancing creature. The Government have ducked it. The whole bothersome task of devising a definition has been shunted to statutory instruments. The Minister prayed in aid the need for flexibility and cited precedent. For a measure this important, those are not satisfactory arguments. They seem more like excuses for sloppy legislation.

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It goes further. We looked in the Bill for an indication of trust responsibilities and board membership--the powers and responsibilities of GPs and other professionals in the management of primary care trusts. We looked for a few critical details about the structure of those bodies. We looked in vain. That information is absent from the Bill. No proper forethought can be given by anybody, least of all your Lordships, to what primary care trusts will mean in practice without an appreciation of these matters. Nor, without some detail in the Bill, can there be confidence about the nature of the proposals. We are entitled to that confidence.

Those are the considerations that underlie the reasoned amendment in my name. Our objections to the Bill spread much wider than the proposals for PCGs and trusts. In last week's debate of my noble friend Lady Gardner of Parkes, I spoke about interference from the Government in clinical decision-making through their attempts to manage waiting lists and through the clinical guidance issued by the National Institute for Clinical Excellence. For all the Government's high-minded objectives on clinical governance, the unspoken subtext is a desire to introduce covert mechanisms that could seriously undermine the clinical autonomy of GPs and clinicians.

Two key parts of those mechanisms are NICE and the commission for health improvement. They should be looked at together. There is a widely shared concern that NICE's remit will focus as much on controlling expenditure as on clinical excellence. We all understand the desirability of controlling expenditure but that cannot and should not be achieved at the expense of clinical freedom or quality of care.

We all understand the need for responsible clinical audit but CHIMP's powers of intervention combined with the first cash-limited drugs budget in the history of our health service will exert real pressure on GPs and clinicians to take rationing decisions that they would not otherwise face. Our health service has always had to take decisions on priorities. Whether we call that rationing, prioritising or anything else is immaterial. What matters is that such decisions are taken as openly and transparently as possible. The Bill puts rationing decisions out of sight of the patient while making GPs and clinicians the fall guys if a rationing decision comes out into the open.

If there is a theme to the Bill, it is control of not only doctors' professional judgment but the system of supervision by which that judgment is regulated. There are provisions in the Bill for the Secretary of State to end self-regulation of the medical profession by Orders in Council. Those powers are excessive and unnecessary. The Government argue that they are necessary to make swift changes without the need for legislation.

We all understand the desirability of making minor changes to the GMC and other professional bodies swiftly and easily but the Bill's powers are sweeping. They would enable the Government to abolish the GMC altogether and set up a substitute body under their control. I do not believe that I am alone in finding that deeply sinister. The British Medical Association has

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described those powers as totally unacceptable to the medical profession and contrary to recent written commitments by the Minister, John Denham. The Government have promised not to abuse those powers. If that is so, why are they needed? Why should we accept as necessary powers that could sweep away without debate in Parliament the ability of doctors to regulate their activities?

The theme continues in the Government's proposals for the pharmaceuticals price regulation system, where they have arrogated to themselves sweeping powers to bring the current voluntary scheme to an end and to control the price of any drug at will. Lower medicine prices are appealing but too much of that will kill the golden goose. The Government say that they will not use the powers widely but if that is done, the policy is bound to lead sooner or later to the withdrawal of products from the UK market and damage to the research capacity of the British pharmaceutical industry. The consequence will be that new products will take much longer to reach British patients. That cannot be right. The Bill's provisions for the PPRS are wrong-headed and excessive.

I see in the Bill the substitution of political control for professional autonomy. I see in the Bill the high-handed use of Orders in Council and the bypassing of Parliament. I see in the Bill voids and spaces where there should be information. I see nothing that does justice to the complexity of the problems in our health service, nor anything that will alleviate those problems. I see instead new, bureaucratic arrangements and new systems for delivering patient care that even family doctors do not believe will improve standards.

I like always to be able to say in your Lordships' House that I do not question the Government's motives for wanting to change our health service. Indeed, change is a fact of life. However, the policies underlying the Bill are not simply misguided. They conceal a government agenda that is designed to obfuscate, not illuminate the basis of clinical decision-making. That part of it makes a bad Bill even worse. Our debates in Committee and at Report stage will provide us with the opportunity to correct some of the Bill's more glaring defects. I beg to move.

Moved, as an amendment to the Motion, That the Bill be now read a second time, at end to insert "but regrets that neither the definition of a Primary Care Trust nor any adequate provisions relating to the functions, powers, responsibilities and structure of such are contained in the Bill; and calls upon Her Majesty's Government to amend the Bill accordingly."--(Earl Howe.)

3.50 p.m.

Lord Clement-Jones: My Lords, perhaps I may, first, thank the Minister for her kind remarks about my predecessor as our party's health spokesman, my noble friend Lady Robson of Kiddington. I know that she will be greatly missed in this House, particularly on these Benches. This Bill is one of the centrepieces of the Government's term of office. It is clearly vital in the delivery of their promises on the NHS. Yet the approach adopted for the Bill is interesting. The Government have

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not taken the opportunity in the legislation to adopt a collaborative and transparent style by which we feel that we can all contribute to the making of the NHS for the next 50 years; instead, they have adopted a dictatorial and opaque style for which they criticised the Conservative government over the 1990 reforms.

The Bill contains unprecedented powers for the Secretary of State for Health to determine vital matters for the health service simply through regulations. Considering the Bill is like being promised a full meal only to be given, on arrival, a voucher for consumption of the meal at a future date. As a result, we on these Benches are, sadly, dissatisfied with virtually every part of the Bill, despite recognising its good intentions.

We welcome the abolition of fund holding. We believe in the goal of a primary care-led NHS and the need to involve all GPs and other professionals, not just some, in primary care planning and secondary care commissioning. We want all localities to be able to innovate, not just a few. However, we have a number of concerns about the creation of the new primary care trusts. Those trusts need to relate to a fully democratically accountable structure for commissioning primary care. The Government are not going far enough in the Bill. As the House of Commons Select Committee said in its recent report, The Relationship between Health and Social Services:

    "The Department of Health's proposals in Partnership in Action to allow a lead commissioner and integrated provision are a step in the right direction. However we consider that the problems of collaboration between Health and Social Services will not be properly resolved until there is an integrated health and social care system, whether this is within the NHS, within local government or within some new separate organisation".
We agree. We believe that after stage two primary care trusts have taken effect, residual health authorities should be merged with local authorities on the basis of coterminous boundaries. Under our model, PCTs would still, as currently envisaged, be the commissioning bodies for secondary care but within the overall context of health improvement plans which we strongly support. The rights and duties of the Secretary of State in relation to PCTs should, however, pass to the combined local authority/health authority.

I turn next to the proposed cash limiting of primary care trusts. The new provisions mean that they will be trusts with their own separate identity and a fixed, cash-limited budget for salaries, premises and drugs, which will need to be adhered to. Therefore, there will be no flexibility in the system to cope with crises, such as epidemics later on in the year. In addition, GPs will be caught between the hammer of a cash-limited budget and the anvil of the demands of the national institute for clinical excellence, specifying which drug treatments constitute best practice. They may find themselves very easily in a rationing situation, which is not of their own making. We do not agree that these cash limits should be imposed on GPs' or PCTs' drug budgets.

There is absolutely no detail in the Bill on the issue of the composition of boards. We believe that the mix of those on PCGs currently is not satisfactory. The former Minister of State went too far in appeasing the medical

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profession. We have the paradox of doctors reported as not wanting to spend time on PCG boards whereas there are members of the professions allied to medicine who would like to sit on such boards but are not entitled to do so. Of course, we recognise the need to maintain the confidence of the medical profession, but chairmanships of PCGs or PCTs should be open to professions other than doctors. For example, why not nurses? Professionals such as community pharmacists and opticians, along with other health professionals, such as physiotherapists, must be strongly involved in building the best possible primary care. The voluntary sector, service users and carers need to be involved. All this should be spelt out in detail in the Bill, but in a flexible way.

Although we support the concept of PCTs, there are no details in the Bill of how individual practices will relate to them. In implementing the new structure, it is vital that individual practices should have enough flexibility and incentive on the one hand to make the best use of resources and, on the other, enough clinical freedom to make the decisions which are right for patients.

Then there is the issue of the transition from PCGs to PCTs. It appears from the Bill that the health authority or the Secretary of State can determine that a PCG will become a PCT without the consent of the PCG. That is clearly unacceptable. They cannot be press-ganged into the new structures. There must be clear, objective criteria and consultative procedures set out on the face of the Bill before a PCG can become a PCT. There are currently some 60 PCGs indicating an intention of becoming PCTs. They need clear guidance in the Bill as to how that will come about.

I move on to the quality agenda, as set out in the consultative paper, A First-Class Service. If implemented properly, this could be one of the Government's great achievements in relation to the NHS. But, as elsewhere in the Bill, the detail is lacking. Why does the duty of quality set out in Clause 13 not also include health authorities and the primary care groups under them?

Despite the recent publication of a consultation paper on how appraisal by the national institute for clinical excellence will work, NICE remains the spectre at the feast. Will the new commission for health improvement be obliged to enforce NICE's recommendations? Should there not be specific provisions in the Bill about this and about how NICE's decisions are reached? We welcome the setting up of the commission for health improvement, but it must retain the confidence of the clinical professions it is auditing. Ofsted is not necessarily the best model; nor will naming and shaming have that effect.

The commission itself should have a broader remit. It must be able to conduct national reviews on topics determined by it, and not just by the Secretary of State. It should be able to act on complaints made by members of NHS staff and the public and must be able to review the broad aspects of clinical care, not just medical standards. What will the relationship of a commission be to the Audit Commission? There must be a clear limit

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to the external audit to which NHS institutions are expected to submit. Above all, the commission should have independence and authority. Perhaps the best model is that of HM Inspectorate of Prisons. All the reports of the commission should be published.

As I mentioned, the Bill should go much further than Partnership in Action in terms of merging health authority and local authority functions. What do Clauses 19 and 20, which set out a duty of co-operation, mean in concrete practice? Is it just motherhood and apple pie? Why are not other partners, such as voluntary organisations and other bodies outside the health service, mentioned?

We strongly support the institution of health improvement programmes, but we need to have strong community, voluntary sector and carer involvement in consultation on the plans. The requirement and mechanism for this should be specified in the Bill, along with a requirement to publish the plans. As it is, the area of joint working arrangements is unclear. Accountability and consultation mechanisms through health improvement boards need to be spelt out in the legislation, not in regulations. Without that it is inappropriate for the Bill to seek to abolish joint consultative committees.

I turn now to the control of prices. These clauses are a tangled web. The Government seem to be keeping every possible option open. What have the Government now decided on the PPRS? Should they not come clean? There have undoubtedly been abuses of the current voluntary system with price hikes of some well-established drugs of as much as 300 to 400 per cent. On the other hand, the pharmaceutical industry is one of the great UK research and development and manufacturing successes. Although the achievements of the PPRS are not certain, it is clear that the relationship of the industry to clinical research in the NHS has benefited both sides.

We oppose the hybrid scheme under Clause 26 where the Secretary of State can effectively enforce a voluntary scheme. The Government need to choose between either developing a voluntary scheme or developing a statutory scheme. We do not believe that a half-way house is acceptable. We on these Benches are attracted by a statutory scheme, but the Secretary of State has a conflict as both regulator and purchaser. The DTI should perhaps be responsible for the regulatory aspects and for the exercise of any powers under Clause 28. That would tie in with any industrial policy designed to ensure a strong pharmaceutical sector for the United Kingdom. But the terms of any statutory scheme need to be spelt out in the Bill. The current clause appears to allow price control for every kind of medicine whether purchased or prescribed in the UK. Will a statutory scheme be based on controlling prices of individual drugs or the profits of drug companies? What will the provisions be? Under any statutory scheme there should be a duty to consult NICE on cost effectiveness before setting prices.

Of all the areas in the Bill the issue of medical discipline is probably the most oppressive as it affects the livelihood of so many professionals in the NHS. The clause allows the Secretary of State to play not just

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Henry VIII but the even more malign Richard III if he chooses to. He can override all opposition in regulating the professions and abolish self-regulation entirely. The treatment of the professions is wholly inadequate in the Bill. There is no protection of title specified for any of the professions allied to medicine.

The Bill should specify the key elements of governance and there should be a common procedure across the professions; otherwise, the Government could set up a whole range of new regulatory bodies and transfer functions to them. In particular the advisory committees for each profession allied to medicine which have been suggested should be enshrined in primary legislation as protection for the principle of self-regulation. The Bill should clearly specify the establishment of the council for the health professions and its advisory committees, the continuance of the GMC and the UKCC, the financial arrangements for the councils ensuring independence, the level and limits of lay representation, the functions of the councils, in particular the power to control entry, keep the definitive register for the professions and remove or restrict registration, and, finally, the reporting link to the Privy Council. Other aspects could be dealt with by regulation. Of course there should be the flexibility to admit new professions by regulation and to change disciplinary procedures. We agree that registration in a profession should be subject to continued competence and that there should be express power for all professional bodies to discipline for incompetence.

We on these Benches support much of the contents of the NHS White Paper and the consultation papers, A First Class Service and Partnership in Action. The Bill contains far less detail than those papers. The Bill is not only a grave disappointment; it is unacceptable in its current form. However, we do not believe that the issues should be dealt with by way of an amendment at Second Reading. The time and the place to consider all the issues I have raised should be the Committee stage. We shall raise those issues in a vigorous fashion at that stage. We shall not support the amendment.

4.3 p.m.

Lord Walton of Detchant: My Lords, this Bill contains several clauses upon which I believe the Government deserve congratulation. However, there are many other matters of fundamental concern to the healthcare professions which give rise to grave anxiety.

Before turning to such fundamental issues, I shall mention briefly several important but less dangerous clauses. First, I note those relating to the regulation of the pharmaceutical industry and the price of NHS medicines. Here I must declare an interest as an occasional neuroscience adviser to a pharmaceutical company. This industry is one of the brightest jewels in Britain's industrial crown, making a major contribution to our balance of payments. Many of the new, effective, if expensive, drugs introduced within the past few years have been discovered in the United Kingdom because of the excellence of the research and development programmes of such companies. It is crucial that any control exercised by government upon their activities

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should take full account of the major costs of such R&D and must be exercised with a light hand and with careful consideration of all relevant issues.

When some years ago I chaired a sub-committee inquiry of your Lordships' Select Committee on Science and Technology into international investment in UK science, we found that there was massive inward investment in UK industry--not least from the USA and Japan--largely in pharmaceuticals, because of the strength of our science base. This must not be imperilled. Concern is mounting about the transfer of drug manufacturing from the UK to countries such as Ireland, where low corporation tax makes such relocation commercially worth while.

My comments on primary care groups and trusts, as described in the Bill, will be brief, as many other of your Lordships are better qualified to discuss these. However, I note that the general principle is commended by the BMA and most other professional organisations. The previous system of fundholding--which I supported--and non-fundholding practices gave rise to some anomalies which should ultimately be resolved by such groups and trusts. Despite the proposed boycott by Bosworth doctors, I believe that these organisations will prove to be successful, always provided that there is adequate funding and involvement in their governance by doctors, and probably dentists, nurses and other healthcare professionals.

I also commend the provisions of the Bill relating to the detection and abolition of fraud. However, in passing I must stress the vital importance of confidentiality of health information, not least in relation to the proposed and welcome establishment of the commission for health improvement (CHIMP). Some time ago I introduced a Bill into your Lordships' House to make it a criminal offence for a non-healthcare professional, such as an NHS administrator or the secretary of a doctor in private practice, to disclose confidential information relating to individual patients. That Bill was not pursued because the then government introduced a code of practice to preserve the confidentiality of such information in the NHS. No such control yet exists in relation to the staff of doctors in private practice. I look forward to hearing the Minister's comments on this point.

The amended responsibilities set out clearly in the Bill relating to the authority of NHS trusts and boards are also welcome, provided the voice of the universities continues to be heard, as indeed are those relating to clinical governance, not only through CHIMP but also through the work of the national institute for clinical excellence (NICE), which will be an important parallel development. I am delighted that my former colleague in the University of Newcastle upon Tyne, Sir Michael Rawlins, will chair that body. NICE and CHIMP together should fulfil crucially important roles relating to improving and maintaining high standards of clinical practice throughout the NHS. As the BMA has said, the UK medical profession is fully committed to ensuring the highest quality of care for all patients and to ensuring that doctors play a full and appropriate

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professional role in systems of self-regulation and clinical governance to achieve this objective, provided always that the necessary resources are made available.

However, I must admit to some anxiety about the additional workload needed to fulfil these worthy goals. The introduction by the previous administration of the purchaser-provider principle, with the avowed aim of enhancing competition between hospitals seemed a brave ideal in seeking value for money, but had several unforeseen and unfortunate consequences. Tertiary referrals to centres of excellence were greatly reduced and research, the lifeblood of medical advance, was also damaged. I trust that the Government will maintain and indeed expand their health R&D programme and will move more rapidly to the projected target of spending 1.5 per cent. of the NHS budget on R&D.

These points are relevant when medical recruitment to the NHS is below target and when those who continue to work loyally and effectively for the service are under increasing pressure. A recent BMJ paper revealed that about 16 per cent. of present day GPs came to the UK, mostly from the Asian sub-continent, in the 1950s and 1960s. Most will retire in the first decade of the next century, by which time the projected increase in medical students will not yet make any contribution to the NHS workload. Incentives persuading doctors to stay in the NHS and not to take early retirement, as so many are doing, are very much needed.

In particular, I must report my concern about the continuing problems of clinical academic medicine. The senior lecturers, readers and professors in clinical departments make a vital contribution to the NHS and many, under pressure from managers, have been required to increase their burden of clinical work in order to bring down waiting lists. Such pressure has inevitably eroded the time available for teaching tomorrow's doctors and for research; hence recruitment into this vitally important field of medicine has shown a serious decline. I trust that the Government are still considering the recommendations of the Richards Report, following the inquiry into NHS research by a sub-committee of your Lordships' Select-Committee on Science and Technology which I was privileged to chair. The continuing involvement of the relevant universities in clinical governance is vital.

While I have commended several provisions of this Bill, I must now express grave concern, which I know is shared, by members of the other healthcare professions, about the provisions in Clause 47 and in Schedule 3 relating to professional regulation. Recently, dedicated, efficient and hardworking doctors throughout the country have been appalled, as have members of the public, by the reported catalogue of errors and/or negligence recently exposed in a number of high-profile cases coming before the GMC and other bodies. The GMC, the BMA and the Royal Colleges are working hard to improve standards of openness and accountability which patients have a right to expect. There has been a fundamental shift in the culture of medicine, and doctors clearly accept the need for transparency about their conduct and professional performance so as to retain public trust. Later this week the GMC will be considering a paper proposing regular

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revalidation by peer review, in collaboration with the Royal Colleges, of the standards of clinical performance of doctors in all branches of the profession.

In 1983 Ralf Dahrendorf (now Lord Dahrendorf) said in his Jephcott Lecture to the Royal Society of Medicine:

    "I would claim that the English professions are a model of the potential of self-government, of an implied contract with society, and thus of liberty. The alternative--the professions bound by the state--is certainly fearful".
He spoke with authority, recognising the problems encountered in his native country, Germany, where the professions are under direct government control.

Even more trenchantly, the noble and learned Lord, Lord Hailsham, in the Spectator in 1988, wrote on "How to ruin the professions". He said that independent learned professions are the hallmark and glory of a free society, but they must respond to public scrutiny and criticism and must never provide cover for incompetence. How true those comments are still.

A recent MORI poll concluded that 91 per cent. of the public are satisfied with their doctors, and trust them. In striking contrast, politicians scored 30-35 per cent. and journalists 15 per cent. Only nurses scored higher, at 96 per cent.

Soon after I joined the GMC in 1971 the Merrison Commission recommended a major reform of that body in order that it should contain a majority of members elected by the profession, along with some lay members. During my presidency, from 1982-89 we gradually increased the number of lay members and every hearing of the Professional Conduct Committee included two lay representatives. In such hearings, it was my experience that the medical members usually took a more critical view of the behaviour of doctors coming before them than did the lay members. But I soon realised that many doctors appearing before that committee were not guilty of serious misconduct but were showing an inadequate standard of professional performance which some would call incompetence. It was therefore my wish to see that, in parallel with the existing procedures dealing with professional conduct and ill health, a mechanism should be introduced to deal with unacceptable clinical performance. During the distinguished presidency of my successor, the noble Lord, Lord Kilpatrick of Kincraig, the Medical Act was amended by the Medical (Professional Performance) Act of 1995; and the GMC now has appropriate powers to deal with these matters.

But today we are not dealing solely with the regulation of the medical profession but also with the regulation of pharmacists, dentists, opticians, osteopaths, chiropractors, nurses, midwives and health visitors. For some years the GMC, the GDC and the UKCC, have wished to see amendments to their powers introduced in the light of new developments, and in order to give greater protection to the public. But the United Kingdom Government have felt unable to devote the necessary legislative time to amending primary legislation.

Hence, some powers to be conferred by this Bill upon the Secretary of State to amend the functions of these bodies by Order in Council are welcome, provided

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always that such orders deal with issues other than the fundamental structure and functions of the self-regulatory bodies. An order-making power could therefore secure desirable improvements within existing regulatory frameworks; and the proposals to abolish the Professions Supplementary to Medicine Act and to give the Secretary of State authority to introduce long-awaited regulatory powers over many other professions are also welcome in principle, but details of the Government's proposals are eagerly awaited, particularly since so many other professions have been seeking self-regulation for many years.

It is to a limited extent reassuring that powers under these clauses will be subject to the affirmative resolution procedure and must be subject, first, to wide consultation with the relevant professions and, secondly, to debate in both Houses of Parliament. However, the powers conferred on the Secretary of State in what is effectively a Henry VIII clause, namely Clause 47 as at present drafted, are in my view excessively wide-ranging. Paragraph 8 of Schedule 3 would enable the Secretary of State to alter fundamental regulatory frameworks established through primary legislation. While Clause 47 could not be used to abolish a regulatory body, it could be used to diminish significantly its powers.

Indeed, it would be possible to transfer the regulatory functions to another body, provided that it was wholly or mainly made up of members of the specified profession. Hence, the Secretary of State could transfer such functions to a government-appointed body of a few professionals, with no lay or professionally elected representatives. I believe that this is a dangerous position. I also believe that the GMC, the GDC and other bodies are moving rapidly towards restoring and indeed maintaining public confidence in the principle of self-regulation. This Bill, at least in Clause 47 and the relevant schedule, could seriously impair the position.

I remind the Minister that the GMC and other regulatory bodies are at present answerable not directly to government but to the Privy Council. This cherished principle renders these bodies to some extent immune from political interference. How will this Bill affect the position? Similar concerns will no doubt be expressed, and have been expressed, by other noble Lords.

It is paradoxical that when last year we debated the Teaching and Higher Education Bill that Bill as originally drafted contained a raft of Henry VIII clauses, granting almost unfettered powers to the Secretary of State over issues such as the discipline and health of the teaching profession. Happily, at Committee stage the Government were persuaded of the crucial importance of expanding the section of the Bill dealing with the powers of the GTC, which proved comparable in the end to those now falling to the professional regulatory bodies in the health field.

Regrettably, therefore, I must conclude that the powers vested in the Secretary of State by Clause 47 and the relevant section of Schedule 3 are draconian and, as at present drafted, unacceptable. We may be assured of the good will of the present Administration, but what of future governments? These provisions represent a major

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flaw in this measure, and I urge the Government to amend them and leave fundamental issues of the functions and structure of these bodies unimpaired.

4.18 p.m.

Baroness Pitkeathley: My Lords, this Bill, I am convinced, contains proposals for some of the most fundamental and far-reaching changes which our beloved National Health Service has seen in all its 50 years of proud history. I want to concentrate on some of those changes today, but first I should like to say a word about change itself.

There are those who say that what the NHS needs above all is a period of stability--and who could not understand the feelings of those who work in the NHS who have had to cope over the years with reorganisations without number? Indeed, when I was employed in the NHS for 12 years I too used to join with the many staff who said that all they wanted was a period without major change. Since then I have come to realise that, when we are talking about any major service in the public or private sectors, we have to understand that the only constant thing about change is that change itself is constant.

How could constant change not be the case for the health service when we consider what has happened to healthcare in the years since the NHS was established--the change in life expectation from the early sixties to the late seventies; the fall in length of hospital stay from 45 days to fewer than seven; the vast developments in treatments such as laser surgery, day surgery, chemotherapy, and so on; and, perhaps above all, the increase in patient expectations and better informed patients who want to be involved in their own healthcare. Any health service which had not changed rapidly in both the treatments it provides and the way it is organised, would have withered and died long ago.

Most people are resistant to change and anxious about it. There is one change in the Bill to which there will be few resisters, and that is the abolition of the so-called market. This pernicious system--which has set hospital against hospital, doctor and nurse against doctor and nurse; which has actively discouraged the sharing of information and encouraged reinvention of wheels; and which has shamelessly provided better services for some patients at the expense of others--will be mourned by few of those who work in our health service. It is a change which is almost universally welcomed by those who have found that patient care is more important to them than winning some notional competition.

The most welcome change to me--because I believe it is the most welcome to patients--is the provision in the Bill for moving to a primary care-led service. Over the years, much lip-service has been paid to the idea of primary-led. I think I first heard the phrase some 25 years ago--although of course in those days we called it "GP-led" because the term "primary care" to embrace all the people and professionals involved had not yet been coined. Everyone has understood the importance of it as this is where most patients' experience of the NHS actually is. But this has not

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happened, and hospitals and secondary care have continued to exert a disproportionate amount of influence on the way in which our health service is organised.

The Bill will change that at last. It will, thereby--if we use the opportunities that it gives us properly--bring huge benefits for patients and their families. Staff at the primary care level are the ones who know about local health needs, and it is they who will now be making decisions which ensure that their patients get the best possible care and treatment.

I also welcome enthusiastically the inclusion of a lay member in the new primary care groups. These primary care groups will not only ensure that local services reflect local needs, but will emphasise quality of service and the closest possible linkages between hospitals, general practitioners and community services. The potential for that seamless service--which patients want and need--is there, although of course we must be aware that the system may take time to work effectively for all patients. Those involved in primary care groups will need to develop their skills and, in some cases, to change their attitudes.

Nowhere will this be more important than in the development of health improvement programmes. To ensure that these improvement programmes achieve maximum impact, it is vital that they are developed in consultation with patient and carer groups.

Thus far, the Bill contains welcome provision for consultation with local authorities and other health professionals. It may be useful to consider whether including a duty of partnership and consultation with local and national voluntary organisations who represent the interests of patients and their families would be helpful. Such groups have pioneered new and effective ways of working, and have revealed needs, and ways of meeting needs, which professionals have not perceived, as the Minister has acknowledged in her speech. I have no doubt that the most effective primary care groups will consult such groups--and, indeed, many are already encouraging their lay members to do so--but the Minister may wish to consider extending encouragement to duty. Such a move would certainly help to ensure that patients were able to offer their views in a constructive way, and that they would be involved in deciding what actually constitutes high-quality healthcare from their point of view, which is surely the most important one.

The inclusion of a place for social services representatives on the primary care groups will make an important contribution to that closer working of health and social services which is so vital to patients, and which has been for so long a source of conflict rather than co-operation. In this respect, I must also mention the welcome provision to allow NHS bodies to transfer payments to local authorities and vice versa for health-related expenditure. The Bill also allows two new arrangements--pooled budgets and a lead commissioner of services, which could be either health or social services.

The Government may wish to consider how the charging policies of local authorities will impact on these arrangements. For example, where a service is

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provided by a health service body on behalf of a local authority, would a person be liable to be charged for that service? That would certainly add to the confusion which already surrounds charging policies and would be a very unwelcome development. I know that the Government intend issuing guidance later this year to ensure that there is more consistency nationally about charging, and I hope that the issue of what is a health service and what is social care will be addressed.

As this Bill passes through your Lordships' House, I believe it is important that we consider it always in conjunction with the many other government initiatives which will impact on our nation's health. The public health agenda, the acknowledgment that healthcare is vitally influenced by poverty, bad housing, poor diet and low expectations, the education agenda, welfare reform and specific initiatives focused at particular groups, such as those for older people and the national carers strategy that we heard about yesterday, will also need to be considered. The development of technology, not only in schemes such as NHS Direct, but the computerisation of doctors' surgeries to include the reception of hospital tests results and electronic links between surgeries and pharmacies, will also be important. All these and many more must be taken into consideration in the modernisation of our national health service.

But, in my view, the most important issue of all--the test against which we must judge how these far-reaching changes work in practice--is without doubt this: will they give the patient more opportunity to contribute to the maintenance of his own health and that of his family? I believe that they will.

4.27 p.m.

Baroness Cumberlege: My Lords, before I enter the debate I should like to declare an interest. I am an executive director of the consultancy firm MJM Healthcare Solutions, whose main client is the National Health Service.

I have a second disclosure. Last week, my much-loved mother-in-law died; her funeral is tomorrow. I have a house full of grieving relatives and I feel that I ought to get back to them. I am torn between your Lordships' House and my family's needs. I feel that I should leave before the end of the debate. I crave your Lordships' forgiveness. I know how cross I used to get as a Minister if noble Lords left before the end of a debate.

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