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The Parliamentary Under-Secretary of State, Department of Health (Lord Warner): My Lords, during consideration of Part 1 of the Bill both in this House and in another place much of the debate has been about the need to balance the ambitions, and relative strength, of individual organisations against the wider interests of local health economies, the NHS nationally and the particular interests of individual patients. I assure the noble Lord, Lord Clement-Jones, that I have reflected on the debate that we had at earlier stages. I acknowledge that these are very important issues that go to the heart of the way we run the NHS. In that regard I have some sympathy with the points that the noble Lord made. However, it is a major strength of the NHS that following implementation of the Government's reform programme there are clear processes for ensuring that the system works as it should. I wish briefly to discuss these arrangements.

First, we have put responsibility for commissioning where it belongs—with primary care trusts—and we are in the process of introducing national tariffs. We have created strategic health authorities with responsibility for planning and supporting delivery of national policy for the NHS within local health economy areas. We have created duties for NHS organisations to co-operate with each other and to work in partnership with local authorities to develop integrated systems of care. We have developed, and will strengthen through this Bill, national quality standards and national inspectorates across health and social care. We have given patients and local people a greater say through patients forums and the creation of overview and scrutiny committees.

The noble Lord, Lord Clement-Jones, made much of the policing point and asked whether we had "policemen" to enforce proper standards and checks in relation to "aggrandising" NHS foundation trusts. I have tried to illustrate that, just as this Government have put many bobbies on the beat, we have many "policemen"—perhaps we should call them community support officers—in this area of the NHS to provide checks and balances. NHS foundation trusts are not entering a totally unregulated and uncontrolled system.

Those are the mechanisms that will ensure the right balance is achieved. I believe that it would create nothing but confusion and uncertainty to overlay those processes with a statutory requirement on the independent regulator in carrying out his duties to

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have regard to the impact of foundation trusts on the local health economy. To do so in addition to his duty with respect to the 1977 Act could well create confusion over how the regulator is to exercise his functions and could extend the regulator's remit into areas that he will not have the knowledge and expertise to determine, and in which the levers he has to take action are limited to one sector only—NHS foundation trusts. He will not have any leverage over other parts of local health economies for the reasons that I have already given.

Such a measure could give the regulator a role in second-guessing the way that NHS organisations fulfil their duty to co-operate with other NHS organisations, and potentially in arbitrating between NHS foundation trusts and other bodies. The effect would be to fetter the freedoms that NHS foundation trusts have to determine locally how best to deliver their NHS obligations and in our view runs counter to the policy of replacing central control with local flexibility and accountability.

NHS foundation trusts will, of course, have to develop and consult on their forward plans taking account of what is going on in the local health economy. That is what the application process and new governance arrangements are designed to achieve. However, this amendment would require NHS foundation trusts to be continually looking over their shoulders and seeking direction from the regulator in a way that would be counter to the policy intention of setting up those trusts. In practice, we believe that it would be likely to stifle rather than promote a culture of innovation. I do not believe that the noble Lord intends that to happen but in our view that would be the effect of this amendment. I hope that when the noble Lord has reflected on my remarks he will feel able to withdraw the amendment.

Lord Clement-Jones: My Lords, I thank the Minister for that reply. That was a splendidly gloomy prognosis for one sentence in the Bill. I shall use it for future occasions. The number of negative verbs—confuse, fetter, second-guess, stifle a culture of innovation—was probably a record in such a short ministerial speech. It was a splendid collection of verbs.

There is a fairly irreconcilable difference. The Minister believes that the amendment would create confusion. On this side of the House, we believe that it would create clarity. It is not intended to fetter. Everything depends on how the phrase would be interpreted, but it would not mean that foundation trusts would need to go back to their nanny to find out what was going on. It is simply a broad, general failsafe mechanism to make sure that foundation trusts operate in a way that is generally congenial to their local health economy. That seems an entirely laudable public policy aim.

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I do not believe that all that negativity will occur. It is a matter of opinion and, in those circumstances, I should like to seek the opinion of the House.

3.30 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 153; Not-Contents, 119.

Division No. 1


Addington, L.
Alexander of Weedon, L.
Allenby of Megiddo, V.
Alton of Liverpool, L.
Anelay of St Johns, B.
Ashcroft, L.
Astor of Hever, L.
Attlee, E.
Avebury, L.
Barker, B. [Teller]
Beaumont of Whitley, L.
Biffen, L.
Blackwell, L.
Blatch, B.
Bowness, L.
Bradshaw, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brookeborough, V.
Brougham and Vaux, L.
Buscombe, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Carnegy of Lour, B.
Cavendish of Furness, L.
Chadlington, L.
Chalker of Wallasey, B.
Chan, L.
Clement-Jones, L. [Teller]
Coe, L.
Cope of Berkeley, L.
Craig of Radley, L.
Crickhowell, L.
Cuckney, L.
Cumberlege, B.
Dean of Harptree, L.
Dholakia, L.
Dixon-Smith, L.
Elliott of Morpeth, L.
Emerton, B.
Ezra, L.
Falkland, V.
Ferrers, E.
Finlay of Llandaff, B.
Flather, B.
Fookes, B.
Freeman, L.
Gardner of Parkes, B.
Garel-Jones, L.
Geraint, L.
Glentoran, L.
Goodhart, L.
Greaves, L.
Hamwee, B.
Hanham, B.
Harris of Richmond, B.
Hayhoe, L.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Howe, E.
Howe of Aberavon, L.
Howe of Idlicote, B.
Howell of Guildford, L.
Hurd of Westwell, L.
Hussey of North Bradley, L.
Jenkin of Roding, L.
Kimball, L.
Kingsland, L.
Knight of Collingtree, B.
Laing of Dunphail, L.
Lamont of Lerwick, L.
Lester of Herne Hill, L.
Lindsay, E.
Liverpool, E.
Lyell, L.
Mackie of Benshie, L.
McNally, L.
Maddock, B.
Mancroft, L.
Mar and Kellie, E.
Masham of Ilton, B.
Mayhew of Twysden, L.
Methuen, L.
Michie of Gallanach, B.
Miller of Chilthorne Domer, B.
Miller of Hendon, B.
Molyneaux of Killead, L.
Monro of Langholm, L.
Montagu of Beaulieu, L.
Montrose, D.
Mowbray and Stourton, L.
Naseby, L.
Newby, L.
Noakes, B.
Northbourne, L.
Northesk, E.
Northover, B.
O'Cathain, B.
Onslow, E.
Park of Monmouth, B.
Peel, E.
Pilkington of Oxenford, L.
Plumb, L.
Portsmouth, Bp.
Prior, L.
Rawlings, B.
Rawlinson of Ewell, L.
Razzall, L.
Reay, L.
Redesdale, L.
Rees, L.
Rennard, L.
Renton, L.
Roberts of Conwy, L.
Rodgers of Quarry Bank, L.
Rogan, L.
Roper, L.
Rotherwick, L.
Sandberg, L.
Scott of Needham Market, B.
Seccombe, B.
Selsdon, L.
Sharman, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Shutt of Greetland, L.
Skelmersdale, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Steel of Aikwood, L.
Sutherland of Houndwood, L.
Swinfen, L.
Tanlaw, L.
Taverne, L.
Tebbit, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Tordoff, L.
Trefgarne, L.
Trumpington, B.
Tugendhat, L.
Ullswater, V.
Vinson, L.
Vivian, L.
Wade of Chorlton, L.
Wakeham, L.
Walmsley, B.
Watson of Richmond, L.
Wigoder, L.
Williams of Crosby, B.


Acton, L.
Amos, B. (Lord President)
Andrews, B.
Archer of Sandwell, L.
Ashley of Stoke, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Berkeley, L.
Billingham, B.
Borrie, L.
Bragg, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Campbell-Savours, L.
Carey of Clifton, L.
Carter, L.
Chalfont, L.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Cohen of Pimlico, B.
Colville of Culross, V.
Corbett of Castle Vale, L.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Desai, L.
Dixon, L.
Donoughue, L.
Dormand of Easington, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Falconer of Thoroton, L. (Lord Chancellor)
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Gale, B.
Gibson of Market Rasen, B.
Gilbert, L.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Gregson, L.
Grocott, L. [Teller]
Hannay of Chiswick, L.
Harrison, L.
Haskel, L.
Haskins, L.
Hayman, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howells of St. Davids, B.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Islwyn, L.
Janner of Braunstone, L.
Jay of Paddington, B.
Jones, L.
King of West Bromwich, L.
Kirkhill, L.
Lea of Crondall, L.
Lewis of Newnham, L.
Lockwood, B.
Lofthouse of Pontefract, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Marsh, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Mishcon, L.
Mitchell, L.
Morgan, L.
Morris of Aberavon, L.
Nicol, B.
Orme, L.
Patel of Blackburn, L.
Paul, L.
Peston, L.
Plant of Highfield, L.
Prys-Davies, L.
Radice, L.
Randall of St. Budeaux, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Sainsbury of Turville, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Stallard, L.
Stone of Blackheath, L.
Strange, B.
Taylor of Blackburn, L.
Temple-Morris, L.
Tenby, V.
Thornton, B.
Tomlinson, L.
Turnberg, L.
Turner of Camden, B.
Walton of Detchant, L.
Warner, L.
Wedderburn of Charlton, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

18 Nov 2003 : Column 1864

3.41 p.m.

Clause 12 [Prudential borrowing code]:

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