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Lord Watson of Richmond: My Lords, is not the A400M essential to the heavy-lift capability of any European rapid reaction force, so that the credibility of such a force hinges on the project continuing? Will the Minister confirm that that is fully understood by the German Government and that he is confident that the in-service date of 2010 can and will be met?
Lord Bach: My Lords, I have no doubt that the German Government are in favour of the A400M
project. They have done nothing to suggest that they are not. It is an essential part of our defence project, both at home and abroad.
Lord Gilbert: My Lords, it is not the case that only a Liberal Democrat Peer could think that the A400M was essential for our heavy-lift capability when it will not carry a modern main battle tank, our AS90, tank transporter equipment, heavy bridging equipment and so on? But leaving that aside—it is of course a joke of a plane as it exists only on paper at present—can my noble friend tell us what was the initial full unit cost of the A400M, what it was after the Italians sensibly cancelled their order for 20, and what it will be after we have the new engine that we are told we suddenly need, which is not even at the design stage, and after the Germans have failed to pay any of the development costs until they have received the plane?
Lord Bach: My Lords, I have the highest opinion of my noble friend. He has been extremely good and generous to me since I took on this job and it is rarely that I disagree with him, but I do so profoundly with regard to this aeroplane. I shall try to answer his questions briefly.
The original unit cost of the A400M falls under commercial in-confidence rules, so I am unable to give my noble friend the information. I should like to, but I am unable to; my noble friend should understand that better than most. The withdrawal of Italy from the programme occurred during the latter stages of price negotiation. While it is fair to say that such a reduction in overall aircraft numbers would have had a negative cost impact, it was one of many changing factors—some of which were positive in their financial effect—considered at the time. The company, which, as I said, is responsible for the project, did not identify any specific cost impact of that withdrawal.
US Steel Tariffs
2.59 p.m.
Lord Razzall asked Her Majesty's Government:
- What steps they propose to take in view of the imposition of steel tariffs by the Government of the United States.
Lord Razzall: My Lords, I thank the Minister for that Answer. I am sure he will accept that it is a somewhat
Kafkaesque situation when, for example, the Democratic Party in the United States is in favour of even higher tariffs on steel and Corus, I understand, has made a significant financial contribution to the campaign for US steel tariffs. Does the Minister accept that, in those circumstances, the danger is that we in the European Union will engage in tit-for-tat measures, leading to a trade war in which the only people to suffer will be the British consumer and the British worker?
Lord Sainsbury of Turville: My Lords, the Government have so far taken four actions. The EU Trade Commissioner, Pascal Lamy, has requested immediate WTO dispute-settlement action. That will, of course, take some time, even if we win—possibly 15 months. With Commissioner Lamy, we are already considering what safeguard action we can take to protect British and European steel producers and workers against a flood of steel imports. The action that we take will be WTO-compatible; we will act within WTO rules. We are also supporting UK exclusion requests and compensation. Only if we pass through the compensation stage can we, under WTO rules, move towards retaliation. The first action will be to press the Americans on compensation.
Lord Barnett: My Lords, does my noble friend the Minister accept that tit-for-tat retaliation on that scale would not be helpful to the UK or anyone else? Would he not rather bring pressure to bear on our "friends"—in quotes—in the United States for them to withdraw what they are doing on tariffs? Retaliation is in nobody's interests—neither those of the US nor those of anyone else.
Lord Sainsbury of Turville: My Lords, in the year since the action was started by President Bush, we have, on numerous occasions, made our views clear. We are not taking any kind of tit-for-tat action at this stage. We are doing something different: protecting our industry from a flood of imports. That is what the safeguard action under the WTO rules is specifically about.
Our argument with America is that the Americans have not seen a flood of imports in the past few years. On the contrary, there has been a substantial decline in the volume of imports into America. They are very much down on two years ago—I think 28 per cent down compared with 1998. In this case, we are within our rights to take action to protect our steel industry from floods of imports.
Lord Howell of Guildford: My Lords, does the Minister agree with the sentiments expressed in the previous two questions that, in this case, the European Union should move cautiously and avoid rushing into any impulsive retaliation? As he rightly said, the WTO and its procedures are the right mechanism with which to sort the matter out. Also, it is clear that the Bush Administration is in a complex political mode whereby this unhelpful and unwelcome move could be a precursor to more trade liberalisation and stronger emphasis on trade freedom. President Bush has indicated that that is still the way he wants to go.
Lord Sainsbury of Turville: My Lords, I am not sure that I understand what a complex political mode is. We can be certain that the British Government will stand by the steel producers and steelworkers in this country in dealing with what many of us regard as a piece of straightforward protectionism. We will take action to defend our industry. We will do so in a measured and considered way, within the WTO rules, but we will stand by it.
Lord Hardy of Wath: My Lords, given the experience of unfair trading within the EU during the 1980s and 1990s, which greatly affected the engineering steel industry, especially in south Yorkshire, one can sympathise with the United States if it can prove that there has been dumping. Have the Government taken any action to assist the engineering steel industry to maintain its traditional, long-established export of engineering steels to the United States? That trade has gone on for a long time, and the Americans expected it to continue. Have the Government made representations and what was the response?
Lord Sainsbury of Turville: My Lords, there is the issue of exclusions. We are working with the steel industry to make certain that if a case can be made for exclusions, it will be made. That is what we are working on.
Lord Acton: My Lords, the Minister mentioned a 15-month period required for the WTO to take action. That seems a long time. Is there anything the Government can do to speed up the WTO machinery?
Lord Sainsbury of Turville: My Lords, the process will take 15 months, including the different stages of making representations, appeals and so on. There is nothing that we can do in these circumstances, although it is desirable in such situations that the process be speeded up.
Business
Lord Carter: My Lords, at a convenient moment after 4.30 p.m., my noble and learned friend Lord Williams of Mostyn will, with the leave of the House, repeat a Statement which is being made in another place on the European Council at Barcelona. After that, my noble friend Lord Bach will, with the leave of the House, repeat a Statement which is being made in another place on Afghanistan deployments.
Marine Wildlife Conservation Bill
Brought from the Commons; read a first time, and to be printed.
Consolidated Fund (No. 2) Bill
Read a third time, and passed.
National Health Service Reform and Health Care Professions Bill
3.8 p.m.
The Parliamentary Under-Secretary of State, Department of Health (Lord Hunt of Kings Heath): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Hunt of Kings Heath.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE CHAIRMAN OF COMMITTEES in the Chair.]
Clause 2 [Primary Care Trusts]:
Baroness Noakes moved Amendment No. 36:
- Page 3, line 5, leave out "It is" and insert "From 1st April 2003, it shall be"
The noble Baroness said: In moving the amendment, I shall speak also to Amendment No. 52. Both amendments concern the readiness of primary care trusts for the responsibilities envisaged for them in the Bill.
Amendment No. 36 is a simple one. It defers the responsibility of the Secretary of State under Clause 2 to create PCTs covering the whole of England until 1st April, 2003. The Government's current intention is to ensure that all PCTs are in place by this October. Many of them will, in fact, exist by this April, only a couple of weeks from now.
The Minister may well say that, as most PCTs will exist legally next month, the amendment is of no practical effect. However, there may be a small number of PCGs that will not have completed the transition to PCT status next month. I remind the Minister that his predecessor, the noble Baroness, Lady Hayman, assured the House that no PCTs would be imposed and that progression to trust status would be,
- "driven locally, based on local views".—[Official Report, 25/2/99; col. 1268]
Will any PCGs not have been converted to PCT status on a so-called voluntary basis by the beginning of April 2002? If so, will the Minister say how many, and where they are located? Will conversion to PCT status be enforced under this Bill, if it becomes law, even if local views—including, importantly, the views of local health professionals—are against it? Will he say whether enforced conversion represents an adequate foundation for a PCT to take on the major new functions envisaged in the Bill?
We on these Benches do not agree with the policy of forced conversion of PCGs to PCTs but we recognise that the Secretary of State is hell-bent on reconfiguring the NHS to his own design. Amendment No. 36 at least seeks to provide a more dignified timetable to allow the hard-pressed NHS to adapt.
Amendment No. 52 is more complex and, in practical terms, more important. It requires the Commission for Health Improvement to investigate the preparedness of PCTs, both before a PCG becomes a PCT and, importantly, before the PCTs are given the new functions envisaged for them in the Bill. If in either event CHI believes that a PCG or a PCT is not ready, it must make a special report which would defer the creation of the PCT or the transfer of functions for one year. In that way, even if there are no PCTs still to be created when the Bill becomes law, the amendment would require a report from CHI on all PCTs' readiness to receive their new functions.
This will be particularly important given the continuing concerns about the ability of PCTs to cope. I am sure that the Minister has listened to the concerns of organisations such as the British Medical Association as to whether, for example, the necessary clinical and managerial staff have been recruited for the role envisaged for future PCTs. I am sure that he will also be aware of the King's Fund tracker survey last year which reported many problems in commissioning, in health improvement and in partnership working, as well as concerns about managerial capacity and information deficiencies.
I am sure that the Minister is aware of the findings of district audit during its visits to PCGs and PCTs during 2001. Unsurprisingly, it found a marked variation in the degree to which those bodies were prepared for their new roles. It found specific risk areas in corporate governance, in information management, in partnerships, in commissioning, in control of prescribing costs and in arrangements for personal medical services.
The Minister may also have read an article in the Health Service Journal last week about a survey of primary care groups and primary care trusts in the south-western region. That found that many were still relying heavily on their health authority for commissioning. It concluded that the proposal to allocate 75 per cent of NHS funds to PCTs by 2004 will be unrealistic in some areas.
Can the Minister say whether the 300 or so PCTs that will be operational next month currently have a chief executive who has the competencies required for the new PCT responsibilities and an appropriately qualified finance director who will be able to cope with the new financial requirements involving 75 per cent of total NHS spending? In this connection, the King's Fund tracker survey found last year that one in seven had no finance staff at all. A cursory glance at the recruitment pages of the Health Service Journal will show that many, many posts remain to be filled.
Will the PCTs have an appropriately qualified public health specialist capable of pursuing the public health agenda that the Government envisage for PCTs, including the development and delivery of health improvement plans? Will they have appropriately qualified staff to handle the whole range of functions, including, most importantly, commissioning and the new revalidation and regulatory requirements in relation to primary care? Will they have adequate
information systems? And last but not least, will they have adequate budgets to pay for all of this? These requirements are not in the "nice to have" category; they are essential if the planned additional functions are to be delegated to PCTs.Does the Minister accept that there are major gaps in readiness among PCTs—gaps so great that it is unrealistic to think of a commencement date of October this year? If he does accept that there are gaps, what do the Government intend to do about them?
We on these Benches are profoundly concerned about the preparedness of PCTs, on whose shoulders so much of the burden of delivering the Government's aspirations for the NHS will rest. That is why we believe that the implementation of the new PCT functions should not take place until there has been an independent examination by experts. The Commission for Health Improvement seems to fit that Bill but an alternative could be to use the Audit Commission, which is even more independent.
We urge caution until it is clear that the requisite capabilities demonstrably exist. It may well be that some PCTs are, in the Government's view, ready to proceed, but I hope that the Minister will not claim that that is the position of all PCTs because all of the available evidence is against that. If the Government insist that the change must be on a 100 per cent basis rather than a more cautious, phased approach, we believe that the pace of the slowest must prevail. Will the Government now consider a phased approach? I beg to move.
3.15 p.m.
Lord Clement-Jones: We on these Benches support the two amendments, particularly Amendment No. 52, to which I have put my name. As the Minister knows, in an ideal world we would prefer a scheme whereby, as agreed under the Health Act 1999, health authorities would determine the point where PCGs had enough capacity to become PCTs. It would be a local decision and the duties would be assigned to PCTs according to their capacity at the time. Under the Bill, there will be an almost compulsory changeover to PCT status and then an assignment of duties to those PCTs in a completely non-discriminating way in terms of whether or not they have the resources and the capacity to take them on.
The Minister will be well aware that there is considerable doubt and uncertainty as to whether PCTs across the board will be in a position to assume those roles and responsibilities. It is particularly notable how common that view is in the area of commissioning. Later this week, seven all-party groups will gather to talk about this issue—the All-Party Parliamentary Groups on AIDS, on Cancer, on Health, on Maternity, on Men's Health, on Mental Health and on Primary Care and Public Health. A fairly considerable degree of concern is being expressed by all those involved in those all-party groups. The Minister would have to be insensitive not to understand that there is great concern about the capacity of PCTs in these circumstances.
We on these Benches agree with the BMA that PCTs are new organisations and the demands being placed on them by the Bill may be beyond their existing capacity. Indeed, as the noble Baroness, Lady Noakes, pointed out, the reorganisation is virtually there in advance of the Bill. Whether or not they have the capacity and resources, the Secretary of State has, in effect, anticipated the outcome of the Bill. He has shown a degree of confidence that Ministers do not normally possess.
As the noble Baroness, Lady Noakes, explained, PCTs are already experiencing difficulties in recruiting clinical and managerial staff who are able and willing to participate in the roles to which they will be assigned. It has been explained in the Commons that PCTs will be up and running by October this year or next spring, but even that date is ambitious given that there are many primary care groups which were insufficiently prepared in the first place for the move to PCT status.
PCTs will be responsible for assessing the health needs of their local communities and for preparing plans for health improvement, and a strengthened public health function will be needed for PCTs to provide this needs assessment function. As the Minister is aware, the public health function is an area where there is grave uncertainty about whether PCTs will have the capacity, resources or expertise to handle their new functions.
In addition to the public health function, the Government want PCTs to be the lead NHS organisation in joint working with local authorities and others as part of local strategic partnerships. Together with the BMA, we are concerned that while advances in health may not be related to the healthcare system, the primary responsibility of PCTs must be to provide a proper and adequate healthcare service. The emphasis of PCT activities must be on that core activity. But what we now see happening is that the Government are loading them with other functions which may mean that those core functions are not going to be properly carried out.
There is the national PCT development programme. I should like the Minister to give an absolute assurance that PCTs will be in a position to carry out their functions and that they will have the resources and the expertise. That requires a considerable degree of confidence from the Minister. I very much look forward to hearing what he has to say.
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