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Lord Hunt of Kings Heath: No, I do not believe that that follows. If they had been set up by a national agency, the national agency would still have been subject to the kind of pressures to which my noble friend refers.

On the general point, on whether the Bill before us contains sufficient freedoms for foundation trusts, I believe that the answer is that it does not. Compromises have been made and I am disappointed that foundation trusts will be so constrained. In the NHS we have learned that it is better to take one or two steps at a time and then build on that. I believe that what is before the Committee is certainly the right way to go forward; that foundation trusts will allow us, in time, to introduce many more freedoms; and I am sure that this is the better approach than setting up a public corporation which, frankly, belongs to the thinking of the 1940s rather than to the current day.

Baroness Carnegy of Lour: I have listened with enormous interest to what the noble Lord has said. He knows all about the matter. I also listened with care to the noble Lord, Lord Desai, and found myself imagining the agency, sitting in all its splendour,

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chaired by the noble Lord, Lord Desai. One wonders exactly what would go on. I think that would be extremely revealing to us all.

I want to ask my noble friend Lady Cumberlege a couple of questions. I see the strength in what she says and it has been backed up by many people who work in the health service and who know all about it. I have no interest to declare, so I look at the matter as a patient of the National Health Service.

My first question is based on my recollection as a member, many years ago, of the Manpower Services Commission, which was placed in the same position as my noble friend suggests the agency should be. The commissioners had responsibility for many areas of employment, particularly unemployment and the measures to combat high unemployment at that time. While I was a member of the commission I came to this House and sat on the other side behind the Government, knowing everything that there was to know about the issue with which we were dealing in the Manpower Services Commission. Questions were constantly asked by noble Lords and the answers came from the Department of Employment; they could not come from the Manpower Services Commission as that was not its job. I knew that the answers were almost always inaccurate because the Department of Employment did not know the position; the Manpower Services Commission did. The department could not answer detailed questions. Under this situation what would be the position when questions were asked in Parliament about the National Health Service? Would the department know the answers, which would really be in the hands of the agency? That is a big question about answerability. I ask it in a general way, because it is an important issue.

Members of the Committee will not be surprised that my other question is about Scotland. The amendments concern England; the Bill is largely concerned with England and Wales, although part of it concerns Scotland. But the Scottish National Health Service simply cannot be separated from the rest of the United Kingdom, despite the fact that its running is devolved. It cannot be separated partly because services go cross-Border and standards need to go cross-Border; but also because funding implications for the National Health Service in England hugely affect the funding of the Scottish bloc, and so of the National Health Service in Scotland. That is because, through the Barnett formula, Scottish funding is related to English funding.

Does my noble friend know whether the King's Fund has been in consultation with the National Health Service in Scotland about how the proposals would affect Scotland? We must ask that, because it has much bigger implications than those who have not thought about the matter carefully would suppose. So those are my two questions: answerability to Parliament and where the proposal would leave Scotland.

Earl Howe: It does not surprise me in the least that my noble friend should have wished to focus our minds once again on an idea that excited a lively debate in

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March last year. She has to be commended for doing so because, as the noble Lord, Lord Walton, observed, the concepts embodied in her amendment are a natural development of the philosophy underpinning the Bill. I say that they are a natural development because trying to distance the NHS from the Department of Health, as her amendments would do, is clearly not the same as devolving decision-making downwards in the NHS. We could create an arm's-length agency and still have a centralised decision-making structure.

If one reads the list of functions of the proposed agency set out in Amendment No. 3, it appears to be a rather top-down body. I hasten to add that that is not a real criticism because we all know that my noble friend would not regard the amendments as a stand-alone set of proposals. Indeed, her views on instilling a spirit of innovation from the bottom up and on motivating staff by good leadership are ones that she has articulated persuasively more than once. The two ideas are complementary. We can debate the merits of the amendments without passing judgment on whether Part 1 has been sensibly put together.

When we last debated this topic, several noble Lords, of whom I was one, referred to the succession of structural changes imposed on the NHS by governments of both parties ever since the 1960s. It is natural for elected politicians who have promised the voters a better health service to believe that the way to deliver on those promises is to reform the way in which the NHS is organised.

As several noble Lords have reminded us today, NHS reorganisation has been a constant feature of this Government's term of office, of the previous Conservative government's term of office and of that of the Labour government before that. It was all well intentioned and some of it has been beneficial, but change is always highly disruptive and sometimes its benefits are at best marginal. That is why the idea of an NHS agency has been around in one form or another for some time. Why has it so often been rejected?

The noble Lord, Lord Hunt, reminded us of the Guillebaud committee in the 1950s, the Royal Commission of 1979 and the subsequent work of such eminent individuals as Sir Roy Griffiths, all of whom came down against the idea of an NHS agency. They did so primarily because of what they saw as a need to maintain proper parliamentary accountability for a service that costs a great deal of public money. There is no denying that that is an important concern, but, like my noble friend, I question whether it is a show stopper. The world has moved on in several significant ways since the most recent serious, high-level review of the agency concept.

One way in which it has moved on is that, although the current Government tend to face in two directions, all three main political parties have accepted that a centralised NHS will no longer work and that politicians should not micromanage. That presupposes a lesser role for the Secretary of State in determining the direction in

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which the ship is steered. So the argument is now how far that devolutionary process should go; no longer is it about preserving the old Bevanite top-down structure.

The fact is that if you ask people what they most want politicians to do to the NHS, the answer is, "Please stop treating it as a political football". That cry must resonate with us loudly. We ought to be looking for ways to finesse the argument for those who historically have opposed the idea of distancing politicians from the NHS, simply because there is now a public hunger to do just that.

My noble friend reminded us that when this Government came to office, they did something very bold, which was to transfer decision-making on the setting of interest rates to an independent monetary committee bound only by an inflation target set by the Chancellor. That devolution of decision-making has been a triumphant success. The charge levelled at successive Chancellors—often unjustly, but levelled nevertheless—was that decisions on interest rates could never be immune from considerations of party-political advantage. That charge—just or unjust—cannot now be made. The success of the monetary committee is the reason why I believe that the ideas propounded by the King's Fund and my noble friend deserve a lot more air time.

Of course Ministers need to account to Parliament for how public money has been used, but they also need to be able to reduce to the minimum the kicking around of the NHS football, whether through allocation of funds, the appointment process, inappropriate target setting or whatever.

Earl Russell: Is it an appropriate way of making the delimitation that the noble Earl has suggested to stick to the existing rule that politicians do not make clinical judgments and to scrutinise targets to see how many of them contain a concealed clinical judgment?

Earl Howe: The noble Earl makes an extremely important point. To a large extent, I would go along with him. Despite what the noble Lord, Lord Hunt of Kings Heath, said in its favour, the trouble with a lot of target setting is that it conceals many clinical judgments, which it is no part of politicians' remit to make.

I simply conclude by saying that I am very pleased that my noble friend has started our Committee proceedings in this way. She has surely put our minds on to a most appropriate track as we discuss the Bill.

Lord Clement-Jones: Having listened to the speeches in this debate, I have considerable sympathy with the amendment moved by the noble Baroness. Members of the Committee spoke of their response and that of NHS staff to the micromanagement of successive Secretaries of State. Several times in this House I have used the analogy of Groundhog Day when once again, for the fifth or sixth time, we are faced with a new NHS reform Bill that the Secretary of State at the time believes will solve the problems of the NHS. We have a new set of political targets; we have a new body to add to the 40 already entitled to inspect NHS

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hospitals. To add to the feeling of Groundhog Day, when the noble Lord, Lord Hunt, was giving his panegyric in support of the Government's policy, I felt that we were back to the good old days of the second or third NHS reform Bill.

4.30 p.m.

Lord Hunt of Kings Heath: I am grateful to the noble Lord for giving way. Is it not a fact that most of the interventions that the noble Lord has made from the Front Bench over the past five years have been to call on the Government to take central action and to issue yet more targets for the health service?

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