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Baroness Carnegy of Lour: My Lords, as regards the Minister's second answer to my noble friend Lady Young, can the noble Lord tell the House whether the Government think it acceptable for Ministers at the Dispatch Box to give brush-offs?

Lord McIntosh of Haringey: No, my Lords; that is why I did not do it. I did not give a brush-off.

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NHS: Pay Award Funding

2.57 p.m.

Baroness Gardner of Parkes asked Her Majesty's Government:

    What is their assessment of the additional funding required from health authorities beyond the £100 million from the central fund for modernisation of the NHS to meet the NHS pay awards announced recently.

Baroness Hayman: My Lords, health authorities were allocated average funding increases of 6.5 per cent. for next year. Above this, an additional £100 million from the modernisation fund will support local recruitment and retention and the modernisation of the nurses' payscales. It is our assessment that no additional funding will be needed to meet the costs of the awards and to succeed in recruiting and retaining the staff that the NHS needs.

Baroness Gardner of Parkes: My Lords, I thank the Minister for her reply, but I cannot accept that no additional funding will be required. Can the Minister tell the House where the funding will come from to pay the many people within the NHS who are due for pay increases but who are not covered by the pay review boards?

Baroness Hayman: My Lords, as I said, the average increase for every health authority in the country is 6.5 per cent. for next year. The pay increase that the NHS review bodies recommended averages out at about 4.8 per cent. A tranche of that--something like 0.8 per cent.--will be met by the £100 million from the modernisation fund for the specific issues around local recruitment and retention. Within that very generous overall increase, it is our belief that there is room to fund these awards, including the non-pay review body awards.

Lord Clement-Jones: My Lords, I am sure that the Minister has seen the figures produced by the NHS Confederation. It estimates that, as a result of having been able to budget for only a 2.5 per cent. increase, despite the 4.8 actual increase that the Minister mentioned, and because only £100 million will be coming from the modernisation fund, there will actually be a 0.9 per cent. shortfall. Does the Minister agree with that figure?

Baroness Hayman: No, my Lords, I do not agree with that figure for the reasons that I gave earlier. It is interesting to note that now we are being accused of putting only £100 million from the modernisation fund into the pay bill. I thought the line of argument proposed earlier was that all the money from the modernisation fund would go into the pay bill and we would not be able to use it for modernisation.

Baroness Pitkeathley: My Lords, does my noble friend agree that while it is natural for all noble Lords to be concerned about the funding of the health service,

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it is important to remember that some of the new developments, such as cutting the number of local commissioning bodies from 4,000 to 500, the development of NHS Direct and the development of technology within the NHS, will enable us to make far better use of the available resources?

Baroness Hayman: My Lords, my noble friend is absolutely right. That is why it is important that we safeguard the modernisation fund as it allows us to unlock savings within the service to plough back into patient care. That is why the £50 million that is being spent on implementing the information strategy, the £30 million that is being spent on modernising A&E departments, and the £40 million on other capital improvements--including schemes to improve waiting times and, of course, the introduction of NHS Direct--together show ways in which we can provide a higher quality service at a lower cost.

Earl Howe: My Lords, during recent weeks we have seen a number of announcements about NHS spending. How are the Government keeping a tally of the balance of uncommitted funds in the modernisation fund? Is the noble Baroness able to tell the House what amount of the fund remains uncommitted?

Baroness Hayman: My Lords, I reassure the noble Earl that, as regards the £1.2 billion of the modernisation fund, the money that we have spent and allocated to staff development, recruitment and retention, to which I alluded earlier, will not prejudice the other blocks of money clearly allocated to tackling waiting times, the modernisation of A&E departments, NHS Direct, primary care, public health issues such as smoking cessation, and improving mental health services. We are keeping a running tally and the figures add up.

Lord Elton: My Lords, following the reply given by the noble Baroness to her noble friend in the previous answer but one, to what extent are the savings she referred to offset by the increased costs from the development of new and expensive surgical procedures, which seems to be rapid, and the actuarial rise in life expectation which enormously increases the number of customers for the health service?

Baroness Hayman: My Lords, those are not simple questions to which simple answers, in terms of money, can be given. The noble Lord suggests that technological advances in surgery result in greater expense. They can, of course, also result in less expense. For example, in the case of laprascopic surgery, people have to spend less time in hospital. The costs of some new and seemingly expensive drug treatments can be offset against not having to admit people into hospital in the first place. Therefore, they can result in a saving of money. These are the complexities involved in running a health service with the demographic and technological demands that there are upon it.

Baroness Gardner of Parkes: My Lords, will the Minister clarify the percentage she announced is to be

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given as an extra amount? I understood that that was not just for pay but applied to all the expenses in the health service. Will she clarify that that is the case?

Baroness Hayman: My Lords, I am happy to clarify that for the noble Baroness. It is a 6.5 per cent. average funding increase across the board, on which there will be other demands as well as the demands of pay. I suggested that there was some headroom there. We have to consider also in the equation the cost savings that can result from efficiency savings.

Lord Rowallan: My Lords, will the Minister confirm that some of the money that was recently diverted from the original five good causes in the lottery towards the new opportunities fund--of which health forms a major part--will now be put towards this extra cost to the NHS?

Baroness Hayman: My Lords, if I understand the noble Lord's question, I cannot confirm that. The basis on which new opportunities funding would be made available to the NHS is clearly based on the ground of additionality for additional resources. We have seen that in regard to the healthy living centres which are an innovation. The proposals that are out for consultation at the moment involve improving cancer services across a range of areas in partnership with local communities. That is in addition to the baseline funding which has already been announced.

Baroness Pitkeathley: My Lords, I must declare an interest as the chair of the New Opportunities Fund. Does my noble friend agree that the money allocated is done so clearly on the ground of additionality and also to sustain the long established tradition of co-operation with the voluntary sector and community groups which help the NHS with regard to its services to patients?

Baroness Hayman: My Lords, I am happy to confirm that. I think all of us who have been associated with the health service know how grateful it is for the support of charitable bodies and local communities in fundraising to enhance the services that are provided by the NHS.


Lord Carter: My Lords, in view of the long list of speakers for the debate which is scheduled to take place this afternoon and tomorrow on the White Paper on reform of your Lordships' House I thought it might be helpful to indicate to the House the result of discussions through the usual channels. While the debate is, of course, not time-limited, if the average time that is taken by each of the Back-Bench speakers is eight minutes, the debate would last about 14 hours in total. This would mean we conclude at a reasonable hour on each of the two evenings. As a second day has been granted for the

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debate I am sure it is in the interests of all your Lordships who will be present throughout the two days for proceedings not to be unduly extended.

House of Lords Reform

3.6 p.m.

Baroness Jay of Paddington rose to move, That this House take note of Her Majesty's Government's White Paper Modernising Parliament: Reforming the House of Lords (Cm 4183).

The noble Baroness said: My Lords, I start on a pleasant note. I am sure that I speak on behalf of the whole House when I wish the noble Lord the Leader of the Opposition a happy birthday. It is not, I trust, a vain hope to anticipate that despite the length of the debate he will have time for a celebratory dinner at least on one evening during the next couple of days.

In opening the debate I shall try--as I always do--to be as helpful as possible to your Lordships' House. Tomorrow evening my noble friend the Chief Whip will respond to as many as possible of the specific points made during the debate. That may be a hard task but it is one I am sure he will rise to with his usual skill.

But I am afraid I may disappoint your Lordships if it is expected that today I will reveal some change of direction or new policy initiative by the Government. The Government's position on reform of your Lordships' House remains unchanged from that we originally drew up before the general election, which is expanded in the White Paper.

In the three previous debates we have held on reform in your Lordships' House since last October, I tried to set out the principles of our policy, to explain the approach we have adopted to put that policy into practice, to describe the narrow parameters and intentions of the legislation which is now being considered by another place, and to indicate the route to long-term reform which the White Paper considers. I am pleased to have a further opportunity to speak on some of the White Paper proposals, but I repeat that I fear your Lordships will hear nothing new from the Government Benches. The Government's view is well known and has been consistently developed.

I hesitate to ascribe motives to Members of your Lordships' House but it may be that the large number of Conservative Peers who will speak in the debate--some of whom I must say are somewhat unaccustomed contributors to the speakers list--are more concerned to hear the opinions of their own Front Bench than those of the Government.

Noble Lords opposite will be aware that no collective statement on reform has emerged since the confusion and upheaval of last December. Back-Bench Conservative hereditary Peers would, for example, be right to ask if their leadership still supports the 1997 campaign position which described them,

    "as an asset to democracy ... who should be defended in principle".

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Recent speeches by Opposition spokesmen in another place appeared to abandon that policy; nevertheless Conservative MPs voted against the Government's first stage reform Bill at Second Reading. It remains a confusing picture.

I am glad that we shall hear from the noble Viscount, Lord Cranborne, as well as the noble Lord the new Leader of the Conservative Party. I hope that we shall see a united policy emerge because from the Government's perspective it would be helpful to have that agreed statement. As the noble Viscount and the noble Lord the Leader of the Opposition will well know, we would genuinely prefer to proceed to reform by consensus. But we can only try to build consensus if we know the basis for discussion, for negotiation and, one hopes, for agreement in the future.

The Government's White Paper Modernising Parliament: Reforming the House of Lords opens with the manifesto commitment, on which the Labour Party was elected by a large majority in 1997. At the risk of falling foul of the Companion's strictures on tedious repetition, I shall venture to repeat that commitment today:

    "The House of Lords must be reformed. As an initial, self-contained reform, not dependent on further reform in the future, the rights of the hereditary peers to sit and vote in the House of Lords will be ended by statute. This will be the first step in a process of reform to make the House of Lords more democratic and representative. The legislative powers of the House of Lords will remain unaltered.

    The system of appointment of life peers to the House of Lords will be reviewed. Our objective will be to ensure that over time party appointees as life peers more accurately reflect the proportion of votes cast at the previous general election. We are committed to maintaining an independent cross-bench presence of life peers. No one political party should seek a majority in the House of Lords.

    A committee of both Houses of Parliament will be appointed to undertake a wide-ranging review of possible further change and then to bring forward proposals for reform".

As noble Lords will be aware, since the general election we have decided to build on the process of review by appointing a Royal Commission. I shall return to the commission later in my speech.

The White Paper falls into three broad areas. The first part discusses the present House of Lords, and the need for the so called "stage one" Bill to remove the rights of hereditary Peers to be Members of Parliament. This Bill was rightly described by my right honourable friend the President of the Council when she introduced it to Parliament as "short, but momentous". It is now in the middle of its passage through another place. It is being considered by a Committee of the Whole House. Therefore your Lordships will appreciate that it is clearly inappropriate to discuss the detail of the Bill's provisions in today's debate in your Lordships' House. I look forward with enthusiasm to an early Second Reading debate when the Bill reaches this House. I only note in passing that at Second Reading in another place the democratically elected House overwhelmingly endorsed the Bill by a majority of 246--one of the largest majorities of this Parliament, and 69 above the already very large technical majority of 177 which the Government enjoy.

The second section of the White Paper deals with the so-called "transition House"--the House which will exist after the passage of the stage one Bill and before

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long-term reform is complete. The exact composition of that House may, of course, depend on possible amendments to the stage one Bill. I would remind your Lordships that, in any case, approximately 500 life Peers will remain in the transitional House--life Peers appointed by eight successive Prime Ministers over the past 40 years.

Two circulating myths about the transition House are dispelled by those simple facts. First, it will not be a dysfunctional rump, unable to carry out its proper role; and, secondly, it will not be made up of placemen sent here exclusively by today's Prime Minister.

The plans for the transitional House are not in the Bill before Parliament for two reasons: first, precisely because they are intended to be transitional; and, secondly, because there is no need for legislation to achieve the results we want. As we said in the manifesto the Government are not proposing any changes in functions in the transitional stage.

We have therefore determined on a non-statutory package of measures to regulate membership of the House during this period. The Prime Minister has committed himself to take steps to reduce his sole powers of patronage. First, we intend only to seek broad parity of numbers with the main Opposition party, and to allow proportionate creations for the Liberal Democrats and other parties, including of course the Cross-Benchers. In our manifesto we said that we thought party strengths in this House should, over time, move towards reflecting the share of the popular vote at the previous general election. We have therefore now committed ourselves to a smaller share--some 40 per cent. smaller--of the overall strength of this House than we proposed in our manifesto. Again, the simple facts reveal the true situation. In the general election of 1997, the Conservative Party won 34 per cent. of the vote and yet has 66 per cent. of the membership of this House who take a Party whip. By contrast, the Labour Party won 48 per cent. of the vote and has only 24 per cent. of the membership of this House.

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