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Lord McNally: I agree, my Lords, but when the court makes rulings and then makes new ones, it is up to the Executive to consider them carefully and consider the implications before they come to a decision. That is what we are doing, and I have already said that we will update the council of our view-not in seven years' time, but in September.

Lord Grocott: There is clearly difficulty here, particularly between the two parties to the coalition. In an effort to be helpful to the Government, I therefore suggest that they do for this issue what they have done already for so many other aspects of the coalition agreement document-set up a commission.

Lord McNally: Even for a former Chief Whip, that attitude is shameless. As has already been pointed out from the noble Lord's own Benches, that lot sat on this decision for seven years. We have to face a new decision made on 8 April, and we have said that we will bring our conclusions to a September meeting of the council. I think that that is pretty good going.

Pensions: Deepwater Horizon


3.31 pm

Asked By Lord Harrison

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud): My Lords, the Deepwater Horizon spill is an environmental and human tragedy. People saving in a pension scheme may be worried by the recent falls in the BP share price and indeed by market speculation about whether BP will pay a dividend this year. However, most pension schemes will be diversified across a range of investments, which will include not only equities but assets such as gilts, property and cash. Those more heavily weighted towards equities should not be too exposed to a single company.

Lord Harrison: Given that some one pound in six of the moneys received by pension funds comes from BP, does the Minister accept that these environmental risks can become severe financial risks? In light of that, would his coalition Government consider strengthening the reporting by pension funds to shareholders of these environmental, social and governance risks to ensure that the pension funds are not embarrassed in the way that they could be as a result of the recent tragedy?

Lord Freud: My Lords, the noble Lord, Lord Harrison, is right when he says that BP is a major dividend payer. I think that last year it paid approximately 14 per cent of all dividends in the FTSE 100. This raises the question that the noble Lord has just asked: to what extent are pension funds acting responsibly

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with regard to their ownership responsibilities to companies? There have been improvements in that over the past decade, but the question that we need to consider is whether they have improved enough.

Lord Lee of Trafford: Does the noble Lord agree that the question of BP paying a dividend is a decision for the directors of BP and not for the President of the United States?

Lord Freud: My Lords, whether to pay a dividend is a decision for BP, which is due to make that decision on 27 July at the appropriate board meeting. Anyone who reads the press will know that the company is coming under enormous pressure in the US not to pay a dividend. Indeed, the political pressure may be greater than the financial pressure, because BP is financially soundly based at this juncture.

Lord Soley: Are the Government talking to BP about this, bearing in mind the very real pressures on the company in the United States that could put it under even more pressure? Is not BP in need of help and support from the British Government? Is it being given that?

Lord Freud: My Lords, I understand that the Government are in touch with both the US Administration and BP senior management on a regular basis. Clearly, BP is a private company and one would not want to make public any discussions in that area, whether they were or were not happening.

Lord Richard: My Lords, do the Government feel that BP is being fairly or unfairly treated by the Americans?

Lord Freud: My Lords, that is a deeply political question. Clearly, the emotions raised in the US by this tragedy are enormous. There will be repercussions in the US and in the world as a whole with regard to attitudes towards oil companies. The best that I can say is that we will be watching this space for months to come.

Lord King of Bridgwater: My Lords-

Lord Winston: My Lords, would it not be helpful-

Noble Lords: This side!

Lord King of Bridgwater: My Lords, do not the directors have a duty to the board and the shareholders to meet their correct obligations in full on the serious issues that have arisen in the United States? That must be fully recognised. Having done that, and having made proper assessment of what those are, they also have to recognise the duty to their shareholders in terms of whether to pay a dividend.

Lord Freud: My Lords, I thank my noble friend for that question. Clearly, the BP board has to make some complicated decisions, which are a mix of the financial

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and the political. Market estimates of the cost that the company will have to pay are in the region of £15 billion to £20 billion, although that is purely market speculation and I make no comment about what the Government expect them to be. The company will have to decide in that context whether it is appropriate to pay a dividend.

Lord Harrison: I am grateful to the noble Lord for his reply to my first question-

Lord McKenzie of Luton: My Lords, on the subject of return-

Noble Lords: Time!

Delegated Powers and Regulatory Reform Committee

Merits of Statutory Instruments Committee

Procedure of the House Committee

Refreshment Committee

Works of Art Committee

Membership Motions

3.38 pm

Moved By The Chairman of Committees

Delegated Powers and Regulatory Reform Committee

Merits of Statutory Instruments Committee

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Procedure of the House Committee

Refreshment Committee

Works of Art Committee

Motions agreed.

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Mid Staffordshire NHS Foundation Trust


3.39 pm

The Parliamentary Under-Secretary of State, Department of Health (Earl Howe): My Lords, with the leave of the House, I shall now repeat a Statement made earlier in another place by my right honourable friend the Secretary of State for Health.

"With permission, Mr Speaker, I wish to make a Statement on Mid Staffordshire NHS Foundation Trust. In March last year, the Healthcare Commission's report into Mid Staffordshire and the appalling failures in patient care that were laid bare within it shocked us all. Three reports later and I am announcing today what should have been announced then-a full public inquiry into how these events went undetected and unchallenged for so long. This inquiry will be heard in public, including the evidence, from the oral hearings to the final report. We can only combat a culture of secrecy and restore public confidence by ensuring the fullest openness and transparency in any investigation.

So, why another inquiry? We know only too well what happened at Mid Staffordshire, in all its harrowing detail, and the failings of the trust itself, but we are still little closer to understanding how it was allowed to happen by the wider system. The families of those patients who suffered so dreadfully deserve to know, and so does every NHS patient in this country. This was a failure of the trust first and foremost, but it was also a national failure of the regulatory and supervisory system which should have secured the quality and safety of patient care.

Why was it that it took a determined group of families to expose these failings and campaign tirelessly for answers? I pay tribute, again, to the work of Julie Bailey and Cure the NHS, rightly supported by honourable Members in this House. Why did the primary care trust and strategic health authority not see what was happening and intervene earlier? How was the trust able to gain foundation status while clinical standards were so poor? Why did the regulatory bodies not act sooner to investigate a trust whose mortality rates had been significantly higher than the average since 2003 and whose record in dealing with serious complaints was so poor? The public deserve answers.

The previous reports are clear that a culture of fear existed in which staff did not feel able to report concerns; a culture of secrecy existed in which the trust board shut itself off from what was happening in its hospital and ignored its patients; and a culture of bullying existed which prevented people doing their jobs properly. Yet how these conditions developed has not been satisfactorily addressed. The 800-page report by Robert Francis QC, published in February, gave us a forensic account of the local failures in that hospital and the consequences for patients, but, like its predecessors, his report was limited by its narrow terms of reference.

I am pleased to say that Robert Francis has agreed to chair this new inquiry, and he will have the full statutory force of the Inquiries Act 2005 to compel witnesses to attend and speak under oath. Clearly these are complex issues and Robert Francis has already said he wants to establish an expert panel that can help

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support him through this process. However, it is important for everyone that this inquiry is conducted thoroughly and swiftly, with the aim of providing its final report and conclusions by March 2011. I want to assure the House we will not wait to take earlier action where necessary.

So I can announce today that we are going to give teeth to the current safeguards for whistleblowers in the Public Interest Disclosure Act by reinforcing the NHS constitution to make clear the rights and responsibilities of NHS staff and their employers in respect of whistleblowing; seeking through negotiations with NHS trade unions, to amend terms and conditions of service for NHS staff to include a contractual right to raise concerns in the public interest; issuing unequivocal guidance to NHS organisations that all their contracts of employment should cover staff whistleblowing rights; issuing new guidance to the NHS on supporting and taking action on concerns raised by staff in the public interest; and exploring with NHS staff further measures which could provide a safe and independent authority to which they can turn when their own organisation is not listening or acting on concerns.

In the coming weeks we will be introducing further far-reaching reforms of the NHS, which go to the very heart of the failures at Mid Staffs. This is not about changes in processes or structures. It is about a wider shift in culture-putting patients at the heart of the NHS and focusing on the things that matter most to them. That includes putting the focus on safety. At Mid Staffs safety was not the priority; it was undermined by politically motivated process targets. The first Francis inquiry was crystal clear on this point. As the report says:

"This evidence satisfies me that there was an atmosphere in which front line staff and managers were led to believe that if the targets were not met they would be in danger of losing their jobs. There was an atmosphere which led to decisions being made under pressure about patients, decisions that had nothing to do with patient welfare. As will be seen, the pressure to meet the waiting target was sometimes detrimental to good care in A&E".

We will scrap such process targets and replace them with a new focus on patients' outcomes-the only outcomes that matter. We will empower patients with access to information, giving patients the ability to hold their own records, make informed choices and to interact more readily with clinicians. We will put power in patients' hands because ultimately, if patients had been informed and empowered, if people had listened to them rather than obsessing about centrally mandated processes and targets, these scandalous failings could not have gone unchallenged for so long.

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