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At the same time, I expressed the concern that had been conveyed to me—not least, by the Medical Research Council, the Wellcome Trust and the Association of Medical Research Charities—that the word “research” did not formally appear in the Bill. All innovation is, in many respects, dependent on research. Whether the innovation is physical, social, behavioural, scientific, or whatever its nature, achieving it depends on a background of inquiry and research. For that reason, I believe that the amendment meets our concerns precisely, and I am delighted to see it now come into the Bill.

Baroness Finlay of Llandaff: My Lords, I do not wish to reiterate the words of my noble friend Lord Walton, except to add my thanks to the Minister for having listened so attentively and worked with us to make sure that “research” appears in the Bill. For the record, I also thank him for his recognition that research might originate outside England—for example, in Wales—but result in excellent innovation in England, and that Welsh researchers would not be denied credit simply because their research was done on the other side of Offa’s Dyke.

As we have come to the end of the government amendments to the Bill, I take this opportunity, on behalf of all patients waiting for transplants and on behalf of their families who struggle with the difficulties of transplants, to thank the Minister and the Bill team most sincerely. Although not directly relevant to the amendment, the guidance on the preferential donation principle, which I introduced earlier, is now being taken forward. I have had the privilege of being able to comment on the confidential draft guidance and it looks satisfactory. When linked to the training of transplant co-ordinators, I think it will greatly improve donation rates. I hope that those families with the rare situation which I outlined will ensure that the wishes of the person who died are respected. I am most grateful to the Minister and his team.

Amendment 14 agreed.

Amendment 15

Moved by Baroness Meacher

15: After Clause 32, insert the following new Clause—

“Private health care

(1) The National Health Service Act 2006 (c. 41) is amended as follows.

(2) In section 44 (private health care), after subsection (4) insert—

“(4A) The Secretary of State may by regulations make provision for exceptions to be permitted to the restriction mentioned in subsection (2) subject to the principle that any such exception must in all the circumstances be in the interests of the National Health Service.

(4B) The regulations may specify such other principles and conditions as the Secretary of State may consider appropriate.””

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Baroness Meacher: My Lords, Amendment 15 seeks to enable health trusts to develop private health services outside the private patient cap on condition that they are, in all the circumstances, in the interests of the National Health Service. I must declare an interest as the chair of a mental health foundation trust in east London and I make it clear that my own trust will not plan any changes in its own practice whether or not this amendment becomes law.

The new clause leaves the private patient cap in place, although I believe that as soon as possible it needs to be replaced by a new framework. As we debated in Committee and on Report, the cap varies from one trust to another. I shall not repeat our earlier debates; suffice it to say that the cap is well recognised to be illogical and unhelpful. By providing for exceptions, the amendment opens up an opportunity for rational decision-making as long as the interests of the NHS are served. Introducing that one principle into the Bill is something to which all sides of the House would subscribe.

I hope that proposed new subsection (4B) in the amendment will enable Ministers to introduce regulations which will extend important principles to all private patient service developments, and not only to services developed over and above the level allowed by the cap. Examples would include the principle that private patient services will not be subsidised by the NHS and the principle that those services will not dilute or adversely affect the core values of the NHS. In my view, both are crucial principles but they are absent from the 2006 Act.

A further powerful argument in favour of the amendment is that it will enable the NHS to benefit from the considerable export opportunities provided by our highly respected NHS clinicians. We can ill afford to squander that opportunity. The amendment would protect the NHS, while increasing flexibility. I beg to move.

Earl Howe: My Lords, I cannot add very much to what the noble Baroness has said. The virtue of this amendment, as drafted, is that it would allow the Government to make changes to the rules governing the private patient income cap at a time entirely of their choosing. It would not tie the Government down and it would allow Ministers to reformulate these rules in whatever way they decide, as long as any changes conform to the key principle spelt out in the amendment. In the absence of any likely legislative vehicle for making a change of this kind, at least in the near future, I hope that the amendment will be considered seriously by the Government.

Lord Campbell-Savours: My Lords, I very much hope that my noble friend will reject this amendment for the reasons which were very carefully put by a number of us in Committee. These are incredibly sensitive matters for the House of Commons. When the original legislation went through, undertakings were clearly given by Ministers in the Commons to our Back-Benchers which enabled them to vote for the whole principle enshrined in foundation trust status. I hope that my noble friend is not tempted in any way to re-enter that discussion. If these matters are to be

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considered, it should be on the back of primary legislation which starts in the House of Commons, where Members can then consider them in Committee and they can be dealt with comprehensively before they enter this place. I hope that my noble friend will not take this opportunity to amend the law in any way in this area.

Lord Warner: My Lords, I support the amendment, to which I have put my name. I declare two interests. I was the Minister who moved the offending clause in the 2003 Act in this House. As I said on Report, I repent my sins. I do so again. I will explain why I differ from my noble friend Lord Campbell-Savours. First, I must declare an interest as an adviser to the General Healthcare Group, which is a private hospital. It is in no way asking me to support this amendment; I have had no conversations with the General Healthcare Group about it. I am doing this because I think that the legislation, as framed, is wrong and detrimental to the NHS.

Why do I think that? First, the world has moved on since we passed the legislation in 2003. There was a different set of circumstances then. We now know that foundation trusts are an important part of the NHS landscape. They have proved very successful. If you look at the Healthcare Commission’s ratings, foundation trusts are in many ways extremely successful because of the excellence of their services and their management of financial resources. There were, if we are honest, doubts about foundation trusts at the time that this legislation was passed. Some of those doubts were expressed in the issue of a private patient cap. That is no longer the context in which we are dealing with this.

The cap itself has been arbitrary. It chooses a base year when people were in different positions in terms of their private incomes. The consequence of that definition has been that whether particular trusts are caught by the cap is almost random. I do not make a major claim about this, but it has in a few cases prevented an NHS trust getting foundation trust status because its business case depended—partly because of its international reputation—on growing private practice, usually from overseas earnings that would benefit the NHS. Legislation that is supposed to protect the NHS is, in my view, damaging it. We are moving into a financial climate where the NHS—if I may put it as gently as this—will need every penny that it can get to meet public expectations, which always continue to rise in our modern world, and some of the demographic challenges that it will face. It seems a bit of an own goal to restrict the ability of NHS trusts to marshal their activities, without detriment to NHS patients, so that they can generate some income from this.

My noble friends have said that the case is now under judicial review at the High Court, so it is difficult to deal with this; we should wait for the judgments and then move the legislation that may need to be put in place. I have always found that the courts welcome clarity from the Executive about what their policy intents are. This is not to prejudge the case that is before the High Court, and which was, as I recall, taken apart by UNISON. However, it would be helpful for the Government to be absolutely clear about where they stand on this issue. The issue seems to be one of making it very clear that there is a public acceptance

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that the present cap is arbitrary and unfair; and that there is a willingness on the part of the Government, at an appropriate time, to make changes that will make it fairer and will not stop the NHS benefiting from raising income from private patients—without detriment to NHS patients—which could provide extra income to develop NHS services. I would like much more clarity on this issue because the worst of all worlds would be a judicial judgment which is more restrictive than what we have at the moment, and that cannot be beyond peradventure. We need to be clear about the Government’s position so that we do not end up with an even more restrictive cap and no legislative opportunity to change things back, even to where we thought they were in 2003.

That is why I support the amendment. I hope that we will have some reassurance from the Government on this issue.

3.45 pm

Baroness Barker: My Lords, during our earlier deliberations I had a great deal of sympathy with the position put forward by the noble Lord, Lord Campbell-Savours. My name is on the amendment and the reason for that is very simple. We could debate how foundation trusts operate in great detail and at considerable length—as we did during the passage of the legislation to which the noble Lord, Lord Warner, has just referred—but, ultimately, proposed new subsection (4A) contains the key point, that any private-patient work must be in the interests of the NHS. However long we continue to debate this issue in great detail, I am persuaded that that is the critical point, and the fact that we have agreement across the House on it is important. Another important point is the arbitrary nature of the way in which the cap is working and the problems that it creates for mental health trusts in particular. Those two factors alone were sufficient to convince me that this is a move forward in the right direction.

Lord Campbell-Savours: My Lords, does the noble Baroness accept that this relates not only to mental health trusts? This is a Trojan horse that could be used by a future Government to completely undermine whole areas of the National Health Service. I am astonished to find her name on this amendment.

Baroness Howarth of Breckland: My Lords, I support the amendment because, as the noble Lord, Lord Warner, said, we are in a very changing world. I shall refer only to the area of cross-border healthcare. The present amendments are opening up our thinking to the changes happening in health services. At the moment we have a minimal cross-border healthcare system but the European Union and the Commission are looking at developing it and that will be an added complication. Anything that frees up health trusts’ ability to think through the provision of alternative ways of developing their services would be helpful. I therefore support the amendment.

Lord Walton of Detchant: My Lords, I, too, strongly support the amendment. My attitude may be coloured by my personal experience, but I look back to the time

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when Mrs Castle, later Baroness Castle, attempted to remove all private beds from all National Health Service hospitals. I was a whole-time NHS consultant with a personal chair and I had a major research unit studying neuromuscular diseases in Newcastle-upon-Tyne. In that city there were three major hospitals, each of which had one private bed. The result, to my great regret, was that I could not admit to hospital patients who were referred to me from other countries—patients from Australia, and even two from the United States—to take advantage of my unit’s facilities for research and investigation. There were no private beds to which I could admit them and no private hospital in that city had anything like the facilities necessary for that particular purpose.

This cap was based on private income in hospitals in 2003, but the world has moved on since then. Particularly within our foundation hospitals, but also within our university departments, there are professorial units with innovative procedures and treatments that are being rapidly developed and could prove to be not only extremely important for patients—after all, let us not forget the large number of patients in the UK who are insured for private medical care—but also a very attractive possibility for patients coming to this country from overseas who must by law be private patients if they are admitted to hospitals in the National Health Service.

The present cap is proving to be outdated, illogical and detrimental to processes which could benefit the NHS by bringing in substantial additional finance to support its work. The amendment is cleverly phrased to indicate that:

“The Secretary of State may by regulations make provision for exceptions”.

It rests with the Secretary of State,

That is a very satisfactory way to frame the amendment and I support it strongly.

Baroness Masham of Ilton: My Lords, I would like to ask a question because of what the noble Lord, Lord Campbell-Savours, said. Are there not very strong safeguards in this amendment to protect the National Health Service? I travelled back from Mauritius once with a young child whose face was covered with a terrible cancer. Would it not benefit that sort of patient to be given treatment in our hospitals, because their countries do not have the facilities? We must be a humane country.

Baroness Thornton: My Lords, Amendment 15, tabled by the noble Baroness, Lady Meacher, and supported by the noble Baroness, Lady Barker, the noble Lord, Lord Warner, and the noble Earl, Lord Howe, seeks to maintain the existing rules governing the private patient income cap for NHS foundation trusts. The amendment would allow the Secretary of State to make regulations to permit exceptions to the general rule. An exception could be permitted only if it was in the interests of the NHS to do so. The regulations can specify other conditions and principles on which such exemptions may be permitted.

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The Government recognise the concerns which have been presented to us. We have also listened carefully to the views expressed in debate, not least that caps set by reference to historical income levels appear increasingly arbitrary. The Government sympathise with and understand the intention and spirit behind today’s amendment.

In our previous debates on this issue I made clear the Government’s desire for a wider debate on the cap. Following the outcome of the judicial review on the current legislation, it is our intention to begin a review to address precisely how to strike the right balance between protecting NHS services for NHS patients and allowing NHS foundation trusts the flexibility they need to operate effectively in the best interests of patients. This would mean a review of the cap and appropriate action to follow.

I turn to the specifics of the amendment. It is quite right that to change the cap would require primary legislation. However, I have genuine concerns about the approach that the amendment takes and about rushing into any quick legislative fix. I would like to take a few moments to set out some of the issues raised by the amendment and explain why a broader review following a clear process would be a better and more practical route to take and be in the best interests of the NHS.

As your Lordships know, this is a complex policy area. The fact that we have already discussed it twice, in Grand Committee and on Report, highlights both the range of views that need to be taken into account and the difficulty of crafting legislation.

The amendment would enable the Secretary of State to make exceptions to the current cap. However, it would not remove the cap’s underlying principle that the private income of a foundation trust should be restricted according to levels set in 2002-03. The Secretary of State would be able to use regulations under the amendment to create exemptions to the cap; for example, to allow mental health foundation trusts to carry out private patient work. However, legal advice is that those regulations could not be used to such an extent that the effect of the underpinning primary legislation was nullified. In short, we could not use exemptions to get rid of the underlying rule. The level playing field which was described in Committee by the noble Baroness, Lady Meacher, with a new system having an equal impact on both NHS and foundation trusts, would not be achieved.

As noble Lords will be aware, a judicial review is currently considering what income counts towards the cap. The Government are an interested party in the legal proceedings, so I will not comment on the interpretation of the current provisions. However, noble Lords will wish to be made aware that, even if this amendment were accepted, there would still be the issue of what income counts towards the cap. The court will give a judgment on that issue.

We might best describe this as a quick-fix solution, and I understand why people would be tempted by it, but it would not address the issues and underlying problems with the cap that we have discussed. We need a wholesale review of the underlying rule. The Government believe that the best way to reform the cap would be to

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create a new test or set of principles that would apply equally to all foundation trusts, reforming the rules so that they are clear, logical and work well. We are keen not to replicate the current situation with the cap from the 2003 Act by bringing in new primary legislation without first discussing and testing it thoroughly with the NHS—the people who will put the new arrangements into practice.

We have heard in our discussions the wide range of views on the issue. Key stakeholder organisations inside and outside the NHS should be given the opportunity to contribute to a debate on the design of the new framework which should begin as soon as the judicial review is complete. We should not try to reach a consensus quickly on what the future framework should look like without consulting foundation trusts from the outset. The reform of rules that impact directly on them, in the context of an evolving health policy framework, needs to be considered in the round.

We agree that private patient activity should not lead to a poorer service for NHS patients and that private income should subsidise NHS care and, therefore, be used to improve and widen NHS services. We also agree that NHS foundation trusts must above all preserve and promote the values of the NHS. We therefore need to go through a clear, fair, practical process to develop fully the best policy solution before we legislate—which we will of course do at the first opportunity once the approach has been agreed.

I repeat our commitment to take forward a review following the outcome of the current judicial review. This is the most sensible way of making sure that any new approach reflects the views of those affected and enables us to test those practical solutions. With this assurance in mind, and with thanks to noble Lords for the valuable contributions they have made to the discussion, I hope that the noble Baroness will withdraw the amendment.

Baroness Meacher: My Lords, I thank the Minister for her comments. I recognise that the amendment does not answer all the problems that the cap poses for the NHS—that is inevitable. However, the amendment does enable—quickly—some opportunities for rational decision-making that are not there at the moment.

The amendment clearly places in the Bill a principle that has the support of all sides of the House. I have been given assurances that there are people in the Government who do not have a problem with it, because it is going in the direction that the noble Baroness, Lady Thornton, indicated the Government want to go in. We are saying, “Let us take a step forward in the direction that the Government want to go”.

When the Government are able to institute a review, we would all hope to be involved in it, contribute to it and support it. Then, if possible, a consensus can be found through a good consultation process in which all the issues can be resolved, and a set of principles wider than we are able to deal with today can be put into a future Bill. However, that is all for the future. There is no upcoming health Bill, and the issues are too important to leave for an unspecified opportunity in the future. NHS foundation trusts up and down the country are struggling with this. In my view, having

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the principle in the Bill will affect how people operate. We have boards of governors and members councils out there that will be watching this and will know that the principle is in the Bill—if we can get it in the Bill. Personally, as somebody who passionately believes in the NHS and NHS patients, I want—and we want—that principle in the Bill. Therefore, I wish to test the opinion of the House.

4 pm

Division on Amendment 15

Contents 191; Not-Contents 133.

Amendment 15 agreed.

Division No. 1


Addington, L.
Allenby of Megiddo, V.
Alton of Liverpool, L.
Ampthill, L.
Anelay of St Johns, B. [Teller]
Astor of Hever, L.
Avebury, L.
Baker of Dorking, L.
Barker, B.
Bates, L.
Best, L.
Bew, L.
Blackwell, L.
Bonham-Carter of Yarnbury, B.
Bowness, L.
Boyce, L.
Bradshaw, L.
Bridgeman, V.
Bridges, L.
Brooke of Sutton Mandeville, L.
Brookeborough, V.
Brougham and Vaux, L.
Butler-Sloss, B.
Byford, B.
Caithness, E.
Cameron of Dillington, L.
Campbell of Surbiton, B.
Carlile of Berriew, L.
Carnegy of Lour, B.
Cathcart, E.
Chidgey, L.
Clement-Jones, L.
Cobbold, L.
Colwyn, L.
Condon, L.
Cope of Berkeley, L.
Coussins, B.
Craig of Radley, L.
Crathorne, L.
Crickhowell, L.
Currie of Marylebone, L.
De Mauley, L.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
D'Souza, B.
Dundee, E.
Dykes, L.
Eames, L.
Eccles, V.
Elliott of Morpeth, L.
Elton, L.
Emerton, B.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
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