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I find the logic of this very hard to grasp. Perhaps I am being cynical, but I remember from when I was on the Front Bench that when you are in a hole, you instigate a review. If you have a general election coming up, it is an even better thing to do if you have a policy that is unpopular with your colleagues, your Back Benchers and the trade unions. What is being proposed by the noble Baroness, Lady Meacher, is sensible, logical and fair. It is interim in that 1.5 per cent is arbitrary, but at least we are getting to a greater degree of parity, which the NHS needs. I am working with the NHS a lot at the moment, and there is real concern about the financial situation it is facing. If this brings more money into the National Health Service, we should welcome it.

Baroness Barker:One thing that has not changed in the past six years is that the best children's hospital in Europe, if not the world, is not a foundation trust. That is not insignificant because part of the problem with this debate is that it is wholly out of context. The noble Lord, Lord Campbell-Savours, tried to allude to the complex discussions around the establishment of foundation trusts. What he did not say, although it is right, is that at that time the ability to do private patient work was one of many inducements to make trusts become foundation trusts. In totality, people began to baulk at the extent to which the Government's policy of foundation trusts was being introduced.

The noble Baroness, Lady Meacher, is to be commended for taking something that is arbitrary and inconsistent and replacing it with something that is arbitrary but consistent. That provides the answer as to why this can be only a temporary measure. It is not principled-I do not think the noble Baroness makes any claim that it is principled-nor is it worked out on the basis of any kind of sustainability. It is just an interim fix to enable some foundation trusts to generate more income. Are we prepared to put up with that in the context? With some reluctance, I think I am.

I am not persuaded by some of the arguments that have been made about foundation trusts and their need to generate income. I would be more compelled by them if that argument applied to all NHS trusts. The key part of this amendment is subsection (2A) which states that any powers to raise money from private patient income,

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That is what is important. Whether this amendment will achieve what in practice has been difficult to achieve, and sometimes impossible to achieve, since 1948, I am not sure. That is why there is a case for having a thoroughgoing review of this matter. I have no doubt that an incoming Government of whatever hue will not leave this one alone. I am not given to betting, but if I were, I would suggest that in three years' time, there will be a completely different proposal before your Lordships' House. However, as a very interim measure, I am prepared to accept, albeit with some reluctance, the argument put by the noble Baroness, Lady Meacher.

Baroness Thornton: My Lords, the debate today has shown that this area remains complex. There are a multitude of valuable views and principles that must be balanced. Amendment 14A, tabled by the noble Baroness, Lady Meacher, seeks to raise the level of cap for all foundation trusts to at least 1.5 per cent and introduces a safeguard that private patient activity must in all circumstances be in the interests of the health service. The noble Baroness and I agree that there is a clear case for reform, and I admire the fervour with which she has put her case throughout several debates on this issue. We differ on the means of achieving that aim.

The government amendment seeks to provide an interim flexibility for a tightly defined class of foundation trusts that find themselves in a unique position. They as a class are unable to undertake any innovative work or private work or provide any additional private drugs and are prevented from supporting the Government's well-being agenda. This temporary measure will provide flexibility for these trusts while a full review of the cap is undertaken for all foundation trusts. We have already begun this process with a call for evidence to the NHS and other stakeholders, and we expect to complete the review process by spring. The noble Baroness illustrated the need for a thoroughgoing review. The reason we have not gone further in our amendment is that the risk of unintended consequences is significant and the advantages of developing a solution using the expertise within the NHS are compelling. We do not want to end up once again in our current position with a judicial review on the interpretation of rules ongoing at the same time as the rules are in need of reform.

I also regret to say that this amendment presents serious technical difficulties that we would not want to see in law. The noble Baroness's amendment attempts to introduce a safeguard that, on the face of it, we could all agree with. However, the safeguard also serves to show how difficult this area is. It requires that the private patient activity must in all circumstances be in the interests of the National Health Service. Wording of this type currently exists in legislation and could be a useful guiding principle when considering reform of the cap. However, in this instance, it is legally problematic for three reasons.

First, a foundation trust is already required by its authorisation to abide by its principal purpose of providing goods and services for the purpose of the

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health service in England. This is a different test from that proposed by the noble Baroness, Lady Meacher, and it is not clear what Monitor would be expected to do to give effect to the principle as expressed in the noble Baroness's amendment in addition to the existing requirement.

Secondly, the phrase "in the interests of the health service" is currently used only where legislation needs to be deliberately vague. The issue we are debating here is not one of those cases, and the lack of clarity means that the amendment fails to achieve the protection that the noble Baroness desires. The "interests of the National Health Service" is open to several interpretations. Noble Lords can conceive of an argument that it is in the interests of the National Health Service to prioritise private patients to attract talent for a wider benefit, whereas another interpretation might be that prioritising private patients to the detriment of NHS patients is not ever in the interests of the National Health Service.

Thirdly, the use of the phrase "National Health Service," rather than the established legal term "health service", introduces uncertainty as to whether the amendment is aimed at the interests of the health service in England and Wales, just England, or those of the National Health Service in Scotland or health services in Northern Ireland. The amendment would create legal uncertainty in an area that has already attracted litigation. It is precisely what the Government's review process aims to avoid. By conducting a thorough review, the Government hope to avoid such complications and present to Parliament a solution that could secure a sensible future for our foundation trusts once and for all-a future that gives them freedom to innovate for the benefit of NHS patients within clearly defined rules that ensure that their fundamental public service nature remains unchanged.

Perhaps I may turn to some of the questions asked by noble Lords. The noble Earl, Lord Howe, said that the 5.1 per cent is arbitrary. That number is based on the average cap-

6.30 pm

Earl Howe: I am grateful to the Minister. I think she meant 1.5 per cent rather than 5.1 per cent.

Baroness Thornton: I did mean a 1.5 per cent average cap on all acute foundation trusts in 2008-2009. There is a difference between giving mental health foundation trusts some flexibility where they have none, and changing the basis of the cap for all foundation trusts. There would need to be a proper review before making any wholesale change. This needs to be worked out with the NHS.

The noble Earl said there was no issue of principle at stake any more. The principle of this is that wide-ranging change should take place with full consultation and consideration of the complex details, particularly given the divergence of strong views on this matter.

My noble friend Lord Warner said that the concession did not deal with the arbitrary caps for acute foundation trusts. When MPs and Peers voted through the proposals in 2003, they knew that the cap would vary in an arbitrary way among acute foundation trusts. Mental Health foundation trusts were not conceived of in

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2003, and are a clear exception. Change more widely than this should be based on wide consultation and debate.

My noble friend also raised the Government's position on judicial review. The Government's position has to be founded on the formulation of the current law. We cannot advocate a flexible interpretation if it is not consistent with the legislation that exists at the moment. The issue under discussion today is how best to fix this for the future.

In conducting our review of the cap, we are already seeking evidence widely from the NHS and others. We are committed to involving stakeholders at every step of our policy development, and the development of this concession was no different. It was developed through consultation with the parties concerned, including the trade unions.

The noble Baroness, Lady Cumberlege, raised the issue of new developments such as Monitor and things being different now from the way they were in 2003. The same legislation that established foundation trusts also established Monitor, governors, terms of authorisation and all the other developments that the noble Baroness cites and supports so well.

Baroness Cumberlege: Does the noble Baroness agree that they had not actually been put into practice, so we did not know the results that would come from that legislation?

Baroness Thornton: The noble Baroness makes a very good point. It is exactly why we need a thoroughgoing review.

The Government have already begun their review of this policy and are committed to reform. The amendment seeks to address a genuine anomaly while recognising that the risk of unintended consequences is such that further change must be made only on the most informed of bases and be developed with the NHS. It is important to repeat that this is a technically flawed amendment. The noble Baroness, Lady Meacher, and I share the same goal, and indeed it is shared by many noble Lords. I hope that the House will agree that the Government's way forward presents the best opportunity to secure a viable, long-term solution for foundation trusts. On that basis, I respectfully ask the noble Baroness to withdraw her amendment.

Baroness Meacher: My Lords, I thank the Minister for her reply. She is in a difficult position in arguing the case for a 1.5 per cent cap for a certain category of trust but not for anyone else, but she made a noble effort to do so. However, I take issue with the technical matter she raised. I am assured that a small technical point of that kind can be rectified perfectly well. As the Minister knows, I strongly agree with her that the review is important and I have already welcomed it. I hope that it will lead, in some years' time, to a fully worked through reform of the private patient cap.

In the mean time, I thank noble Lords for their contributions to the debate, in particular the noble Lord, Lord Walton, and the noble Baroness Cumberlege, and of course I thank the noble Earl, Lord Howe, for

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his eloquent words. I thank the noble Lord, Lord Warner, for his straight talking, and the noble Baroness, Lady Barker, for her reasoned arguments. I thank the noble Baroness in particular because I know that this is a tricky issue for her, so her words were warmly received.

The Deputy Speaker (Baroness Fookes): Does the noble Baroness wish to test the opinion of the House?

Baroness Meacher: My Lords, I wish to test the opinion of the House.

6.37 pm

Division on amendment to Motion 12

Contents 85; Not-Contents 131.

Amendment to Motion 12 disagreed.

Division No. 3


Addington, L.
Anelay of St Johns, B.
Ashcroft, L.
Ashdown of Norton-sub-Hamdon, L.
Attlee, E.
Barker, B.
Bates, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Buscombe, B.
Caithness, E.
Cobbold, L.
Colwyn, L.
Cope of Berkeley, L.
Cotter, L.
Courtown, E.
Crisp, L.
Cumberlege, B.
Dear, L.
Deech, B.
Denham, L.
Dholakia, L.
Dixon-Smith, L.
Elton, L.
Falkland, V.
Falkner of Margravine, B.
Fearn, L.
Fookes, B.
Fowler, L.
Goodlad, L.
Greaves, L.
Hamwee, B.
Henley, L.
Howe, E.
James of Blackheath, L.
Jenkin of Roding, L.
Jones of Cheltenham, L.
Jopling, L.
King of Bridgwater, L.
Kirkwood of Kirkhope, L.
Knight of Collingtree, B.
Lester of Herne Hill, L.
Livsey of Talgarth, L.
Luce, L.
Luke, L.
Lyell, L.
McColl of Dulwich, L.
Mackay of Clashfern, L.
McNally, L.
Maddock, B.
Meacher, B. [Teller]
Miller of Chilthorne Domer, B.
Montrose, D.
Morris of Bolton, B.
Murphy, B. [Teller]
Newton of Braintree, L.
Nicholson of Winterbourne, B.
Northover, B.
Redesdale, L.
Rennard, L.
Roberts of Llandudno, L.
Rowe-Beddoe, L.
Saltoun of Abernethy, Ly.
Seccombe, B.
Selborne, E.
Selsdon, L.
Shaw of Northstead, L.
Shutt of Greetland, L.
Skelmersdale, L.
Skidelsky, L.
Smith of Clifton, L.
Strathclyde, L.
Taylor of Holbeach, L.
Thomas of Walliswood, B.
Thomas of Winchester, B.
Tonge, B.
Tope, L.
Tyler, L.
Ullswater, V.
Verma, B.
Wakefield, Bp.
Wallace of Saltaire, L.
Walpole, L.
Warner, L.
Wilcox, B.


Adams of Craigielea, B.
Ahmed, L.
Alton of Liverpool, L.
Anderson of Swansea, L.
Andrews, B.
Archer of Sandwell, L.

9 Nov 2009 : Column 638

Bach, L.
Bassam of Brighton, L. [Teller]
Berkeley, L.
Best, L.
Bilston, L.
Borrie, L.
Bragg, L.
Brennan, L.
Brett, L.
Brooke of Alverthorpe, L.
Brookman, L.
Campbell of Surbiton, B.
Campbell-Savours, L.
Chandos, V.
Christopher, L.
Clark of Windermere, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Craig of Radley, L.
Crawley, B.
Cunningham of Felling, L.
Davies of Abersoch, L.
Davies of Oldham, L.
Desai, L.
Donoughue, L.
D'Souza, B.
Dubs, L.
Eatwell, L.
Elder, L.
Elystan-Morgan, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Falconer of Thoroton, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L. [Teller]
Filkin, L.
Foulkes of Cumnock, L.
Gale, B.
Gibson of Market Rasen, B.
Giddens, L.
Golding, B.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Greenway, L.
Griffiths of Burry Port, L.
Grocott, L.
Harris of Haringey, L.
Harrison, L.
Hart of Chilton, L.
Haskel, L.
Haskins, L.
Haworth, L.
Henig, B.
Hilton of Eggardon, B.
Hollick, L.
Hollis of Heigham, B.
Howarth of Newport, L.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Jay of Paddington, B.
Jones, L.
Jones of Whitchurch, B.
Jordan, L.
King of West Bromwich, L.
Kinnock, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
McDonagh, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
McKenzie of Luton, L.
Mandelson, L.
Martin of Springburn, L.
Massey of Darwen, B.
Mawson, L.
Maxton, L.
Moonie, L.
Morgan of Drefelin, B.
Morris of Aberavon, L.
Morris of Yardley, B.
O'Neill of Clackmannan, L.
Palmer, L.
Patel of Blackburn, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Prosser, B.
Radice, L.
Ramsay of Cartvale, B.
Richard, L.
Rogan, L.
Rooker, L.
Rosser, L.
Rowlands, L.
Royall of Blaisdon, B.
Sawyer, L.
Sewel, L.
Sheldon, L.
Simon, V.
Snape, L.
Soley, L.
Stoddart of Swindon, L.
Symons of Vernham Dean, B.
Temple-Morris, L.
Thornton, B.
Tunnicliffe, L.
Turner of Camden, B.
West of Spithead, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Woolmer of Leeds, L.
Young of Norwood Green, L.

Motion agreed.

6.47 pm

The Deputy Speaker: Before I call the next amendment, I have to inform the House that in the Division on Amendment 11, there voted Contents 83, and not 82, as announced.

Baroness Cumberlege: My Lords, I am very conscious that when I spoke in the previous debate, I did not fully declare my interest. I said that I work

9 Nov 2009 : Column 639

for the NHS, but I believe that I should have said that I run my company, which is called Cumberlege Connections.

Motion on Amendment 13

Moved by Baroness Thornton

Baroness Thornton: My Lords, I beg to move that the House do agree with the Commons in their Amendments 13, 15 and 25. The proposed amendments seek to correct a mistake that has recently come to light and which was made in the Health Act 2006 and which has been consolidated into the National Health Service Act 2006. Commons Amendments 13 and 25 repeal Section 180(2)(c) of the National Health Service Act 2006 while Commons Amendment 15 provides for the new clause set out in Amendment 13 to come into force at the end of a period of two months beginning on the day that this Bill receives Royal Assent and becomes an Act.

Since the introduction of the optical voucher scheme in 1986, government policy relating to the vouchers has been consistent across Administrations. The policy has been that eligibility for NHS optical vouchers should be targeted at children and those in receipt of qualifying income-related benefits or who need a complex appliance. People aged 60 or over are currently included among those who may be eligible for help on low-income grounds or who may need a complex appliance. However, the change introduced by the National Health Service Act 2006 extended eligibility for optical vouchers by mistake to all people aged 60 or over regardless of income. The records show that it was not referred to in the Explanatory Notes, was not discussed during the passage of the Bill through Parliament, and was not the subject of impact assessment or consultation. It was quite simply a mistake made during the process of preparing the draft Bill. Ministers have apologised to the Commons for this mistake and I apologise to noble Lords also. The proposed amendments seek to correct the mistake and reinstate the legislation to reflect what has been a longstanding policy of the Government and what was our intention at the time; namely, that the entitlement should remain unchanged.

We remain of the view that help with the cost of optical appliances through the NHS voucher scheme should be targeted on those most in need, as this represents the best use of NHS funds. We recognise that people aged 60 or over have an increased risk of eye disease, and because of this, those aged 60 or over are eligible for NHS-funded sight tests. This entitlement continues and is unaffected by the proposed amendment. I beg to move.

Motion agreed.

Motion on Amendment 14

Moved by Baroness Thornton

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Baroness Thornton: I spoke to this amendment with Amendment 12. I beg to move.

Amendment to the Motion

Tabled by Baroness Meacher

14A: Insert the following new Clause-

"Private health care

(1) Section 44 (private health care) of the National Health Service Act 2006 (c. 41) is amendment as follows.

(2) In subsection (2)-

(a) after "is not greater than" insert "- (a)";

(b) at end insert "or

(b) 1.5% of the total income of the NHS foundation trust,

whichever is the greater."

(3) After subsection (2) insert-

(2A) The power conferred by subsection (1) must be exercised subject to the principle that the provision of goods and services in return for private charges must in all circumstances be in the interests of the National Health Service."

Not moved.

Motion agreed.

Motion on Amendment 15

Moved by Baroness Thornton

Baroness Thornton: My Lords, I spoke to this amendment with Amendment 13. I beg to move.

Motion agreed.

Motion on Amendment 16

Moved by Baroness Thornton

Baroness Thornton: My Lords, this is the privilege amendment.

Motion agreed.

Motion on Amendments 17 to 25.

Moved by Baroness Thornton

Motion agreed.

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