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House of Lords

Thursday, 9 July 2015.

11 am

Prayers—read by the Lord Bishop of Chester.

Health Funding


11.06 am

Asked by Baroness Walmsley

To ask Her Majesty’s Government whether they carried out an equality impact assessment before deciding on the recent in-year budget cut to public health funding.

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, we pay close attention to equalities considerations when deciding how to distribute the public health grant between local authorities. The Department of Health is about to consult on how to implement the savings and we will address our equalities duties in full when announcing our final decisions.

Baroness Walmsley (LD): My Lords, I thank the Minister for his reply, but given that these cuts will impact on teenage pregnancy programmes for the young, domestic violence programmes for women, HIV prevention programmes for gay men and some members of the BME community and TB prevention programmes for the poor and homeless, will he say where the equality is in that?

Lord Prior of Brampton: The noble Baroness will know that decisions on these matters are left to local authorities, and we wish to give them as much discretion as we can.

Lord Hunt of Kings Heath (Lab): My Lords, there is not much discretion if the Treasury decides to take away £200 million in-year on public health programmes from local authorities. If the intention is to squeeze the public health budget, will the Government therefore take action at national level to compensate for this by legislating to reduce the amount of fat, salt and sugar in food and drinks that are aimed mainly at children and young people?

Lord Prior of Brampton: My Lords, prevention is very important to the Government and a very important part of the NHSFive Year Forward View. The reduction of £200 million in the grant to local authorities should be seen in the context of a total grant of £3.2 billion; it is a 6% reduction. Public Health England has a campaign to raise awareness of the damage that sugar and salt, as well as smoking and alcohol, can do to people’s lives.

Baroness Howarth of Breckland (CB): My Lords, if the noble Lord takes into consideration not only the cuts to this budget but those to other local authority budgets, he will see that this will mean a reduction in

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youth services, the closure of young people’s centres and a range of preventive services for children being reduced. Will that not have a cumulative effect on the general health of the nation, and certainly on the protection of children?

Lord Prior of Brampton: My Lords, the NHS is facing a challenge over the next five years to achieve productivity savings of some £22 billion. If we wish to have a sustainable, tax-funded health service in the long term, we have to make these savings. I have no doubt that over this time this will cause difficulties, but, again, it has to be seen in the context that we have a national debt of more than £1 trillion and a public sector borrowing requirement that must come down.

Baroness McIntosh of Hudnall (Lab): My Lords, does the Minister not agree that, of all the places to cut the National Health Service budget, it is incredibly short-sighted to do so in areas to do with prevention because, although there may be short-term savings to be made there, in the long term it will build up problems which will cost a great deal more in the future?

Lord Prior of Brampton: I repeat my earlier response that prevention is extremely important. We are looking at a relatively small reduction of £200 million out of a total public health budget of more than £5 billion.

Baroness Masham of Ilton (CB): My Lords, does this mean that campaigns on alcohol and drug abuse will be cut? Is the Minister aware that there is a great increase in liver disease and hepatitis C?

Lord Prior of Brampton: The decisions about which services to reduce must lie with local authorities.

Baroness Janke (LD): My Lords, does the Minister realise that many of the contracts for public health are already let in the medium term? Is the proposed cut on uncommitted funding, or are the Government proposing to give some help to local authorities who have no way of ending those contracts?

Lord Prior of Brampton: The noble Baroness raises a good question. This will be a crucial part of our consultation, which will take place very soon.

Lord Harrison (Lab): Does the Minister not recognise that, as was the case in our recent debate on diabetes, wise investment in public spending on health can save billions later, not only in terms of the tragedies in the lives of people who experience suffering from something such as diabetes but also in the weight placed on the public purse to fund the health service?

Lord Prior of Brampton: I agree fully with the noble Lord. Early prevention is crucial, not just for diabetes but for a whole range of mental health issues as well, and prevention will remain a critical part of the five-year forward view.

Lord Mawhinney (Con): My Lords, will my noble friend make arrangements for someone to survey local supermarket shelves and record the number of items for sale that have either no added sugar or are sugar free? Will he then arrange for a similar survey to be conducted among the major supermarkets in the United

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States? After which, will he explain to us what government policy will be applied to try to get us even in the same vicinity as the sugar reductions that are available to American purchasers?

Lord Prior of Brampton: My noble friend raises a very interesting point. I will certainly bring it to the attention of Public Health England and, depending on their reaction, I will be happy to come back to the House and give the noble Lord the answer to his question.

Lord Howarth of Newport (Lab): My Lords, the Government are placing new duties on local authorities in terms of the anti-drugs strategy, and Public Health England, very rightly and admirably, is seeking to develop its contribution to the strategy ambitiously and appropriately. Will the Minister ask his right honourable friend the Secretary of State for Health to give a very strong moral lead, at least to urge local authorities not to reduce spending in this area, which is so crucial to the health and safety of young people in particular?

Lord Prior of Brampton: I will certainly have a word with my friend the Secretary of State for Health. Clearly the Government have an important role in this area; I will have a discussion with him and come back to my noble friend.

Lord Patel (CB): My Lords, this is my first opportunity to ask the noble Lord a question and I welcome him to his new brief. If he were looking at the evidence-based delivery of services, the evidence shows that 40% of illnesses are related to lifestyle. If that is the case, why do we not have a national plan for public health and prevention of disease, rather than leaving it to local authorities, where it will vary?

Lord Prior of Brampton: The noble Lord raises an interesting point, which we may come back to in the debate later. Public health spending is divided into two: £3.2 billion is decentralised to local authorities and the remaining amount, some £2 billion, is retained by Public Health England—which does have a national plan, but it may be that the plan could be better articulated.

Security: State Procession


11.14 am

Asked by Lord Wallace of Saltaire

To ask Her Majesty’s Government what assessment they have made of the potential security risks posed by converting former government buildings into privately owned hotels along the State Procession route between Buckingham Palace and the Palace of Westminster, including along Whitehall.

The Parliamentary Secretary, Cabinet Office (Lord Bridges of Headley) (Con): My Lords, the former government buildings to be converted into hotels along the state procession route are Admiralty Arch and the

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Old War Office. The freeholds remain under government ownership in perpetuity and continued oversight and security measures will be implemented as part of the commercial arrangements with the private sector. Long-term protocols and operating procedures are agreed and built into both schemes. The security and intelligence services and the Metropolitan Police are closely involved in this process.

Lord Wallace of Saltaire (LD): My Lords, does the noble Lord recall that when President Bush made a state visit to London, the entire Whitehall area was cordoned off, including to Members of Parliament? Does he also recall that the IRA, from within the area of Whitehall, managed to mortar No. 10? Further, he will remember that the bombing of the Brighton hotel, which affected Mrs Thatcher and others, was placed in the hotel some time in advance of the incident? Do the security services intend to vet positively all the staff of these hotels; has that been agreed? Will the hotels be closed to all visitors during state visits or will the visitors be vetted as well?

Lord Bridges of Headley: The noble Lord has raised interesting questions based on his own experience. I have looked into the clauses of the leases for both the Old War Office and Admiralty Arch and I am satisfied that they allow for appropriate access for both security and ceremonial purposes. The hotels will employ their own staff, and while the Government have not insisted on security clearances for each member of staff, it is obviously in the hoteliers’ interests to take their security checks on their staff into consideration. Furthermore, I should point out that both the Metropolitan Police and the security services are very involved, as always, in ceremonial processions and major events, and will continue to be so to make sure that security is upheld.

Lord Foulkes of Cumnock (Lab): My Lords, this is privatisation gone mad. Does the noble Lord really think that selling off the Old War Office building, just up the road from the Cenotaph, to a private foreign company for use as a hotel and private apartments will not cause major security risks? Of course it will. There will be Remembrance Day services and the Queen coming to open Parliament; it is extremely dangerous. Surely he must think again.

Lord Bridges of Headley: My Lords, I would take the noble Lord’s advice a lot more seriously if his own party had not recommended that we sell Inn the Park, the Civil Service Club and Marlborough House at the last general election. However, putting that to one side, I also point out that once again the Labour Party seems to be in a state of sleep as regards the deficit, as the noble Lord, Lord Mandelson, seems to have suggested. We do actually need to bring down the deficit—

Noble Lords: Oh!

Lord Bridges of Headley: I am sorry that noble Lords shake their heads but, as my right honourable friend the Chancellor pointed out yesterday, we need to do it. Since 2010 the Government have generated £1.4 billion in land and building sales while the running costs of the estate have fallen by £647 million

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compared with 2009-10. Moreover we have done that while ensuring that security is upheld, as I have explained to the noble Lord.

Lord Lisvane (CB): My Lords, as someone who sought to buy the Curtis Green building for parliamentary use rather than as a luxury hotel, I commend the noble Lord, Lord Wallace of Saltaire, for raising this issue. It is extremely important that a full formal CPNI security assessment is given to Ministers in the case of each building. I ask the Minister to bear in mind that many of these buildings are connected underground. I also ask him to ignore the siren voices which suggest that security can be assured simply by sealing tunnels. It cannot; ask anybody in Hatton Garden.

Lord Bridges of Headley: There are service ducts under many buildings for electricity, telecommunications and other services, and any security risks in relation to them, as with any other part of the buildings, have been assessed and taken into account in the sale of the leases. I need to repeat that the security agencies are involved in all disposals of government property and their advice is always taken into account.

Lord Reid of Cardowan (Lab): My Lords, I must say with some regret to the Minister, who has not long arrived in his post, that I thought his answer to my noble friend Lord Foulkes was not only unsatisfactory but bordering on the disgraceful. He said in his previous answer that it was in the interests of the new private owners to ensure security. National security is a matter for the Government, not for new private owners. As to the reduction of the deficit, while obviously we want to do that, if the cost of reducing the deficit by a couple of hundred million pounds is to put our national security—not to mention the monarch—at risk, it is not a price worth paying. Whichever Government made the decision, will he come back to the House with a more satisfactory answer as to the national security aspects of this particular sell-off?

Lord Bridges of Headley: I apologise if I have caused offence but I was being accused of privatisation. I would, however, beg to differ. I do not believe that these decisions have put the national security at risk and I have been assured that they have gone through the appropriate processes. The properties were designated surplus to requirements, following a thorough review which concluded that the buildings could not within the bounds of costs and internal planning be updated to deliver an acceptable, efficient standard of office accommodation for use in government. The commercial arrangements with the private sector allow for government to incorporate security measures, alongside the Metropolitan Police.

Lord Hamilton of Epsom (Con): Has my noble friend denoted a massive security risk from the Royal Horseguards hotel, which is just round the corner from the Old War Office?

Lord Bridges of Headley: My Lords, I cannot comment on particular aspects of security but I assure your Lordships that all matters of security within the Westminster area are always taken under review.

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Lord Hunt of Kings Heath (Lab): My Lords, will the noble Lord refer this matter to the appropriate Joint Select Committee of both Houses, which looks into these matters? I think that would give a great deal more confidence.

Lord Bridges of Headley: My Lords, let me take that concept away with me. I have looked into this matter over the last few days and I am assured that the relevant security matters have been addressed, and that we have balanced those matters with the need to deliver savings in government.

Lord West of Spithead (Lab):My Lords, on a slightly less serious point, are the new owners responsible for ensuring that all the various flag-staffs, with flags and all the things that are flown on state occasions, will be dealt with correctly? There is a strict format for this and a cost involved. Is that their liability?

Lord Bridges of Headley: The flags for ceremonial events will remain on Admiralty Arch. This is a provision in the lease arrangements. Should the hotel wish to use its own flags, a proposal will have to be made to government to consider how that will be done.

Consumer Protection: Secondary Ticketing


11.21 am

Asked by Lord Clement-Jones

To ask Her Majesty’s Government when they intend to commence the review of the consumer protection measures for the secondary ticketing market under section 94 of the Consumer Rights Act 2015; and who will undertake it.

The Parliamentary Under-Secretary of State, Departments for Business, Innovation and Skills and for Culture, Media and Sport (Baroness Neville-Rolfe) (Con): My Lords, work on appointing the chair and expert group is well advanced and the review will proceed once this and the terms of reference are finalised. We are aware of our statutory obligation to publish a report on its findings by 26 May 2016.

Lord Clement-Jones (LD): My Lords, I thank the Minister for that reply but ticket fraud continues to soar this summer. Circle Tickets has defrauded hundreds of music fans just this June while the RFU reports zero compliance with the Act for World Cup tickets, so the problem remains acute. This review is enshrined in statute as a result of the efforts of the noble Lord, Lord Moynihan, and others only recently. We are now two months out from the general election. When will this review start, will BIS or the DCMS oversee it and what will its scope be?

Baroness Neville-Rolfe: My Lords, as I have said, we will publish details of the review shortly. I share the noble Lord’s disappointment on the enforcement side and, prompted by his Question, I spoke to the City of London Police only last week. I was reassured about some of the actions it is taking, both on its own and with the cultural and sporting bodies, for the important events of this summer. As the noble Lord

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will know, May through to July is the peak period so there will be more cases, but Action Fraud is on to the job.

Lord Moynihan (Con): My Lords, I thank my noble friend for the work that she has undertaken on this subject. Can she assure the House that the review committee members will be provided with a clear legal opinion as to exactly what information can be included on tickets to sport and musical events, within the interpretation of the EU consumer rights directive?

Baroness Neville-Rolfe: I thank my noble friend for all he has done to move forward the consumer offer in this important area. I can confirm that the review will assess the current law, including changes we made in the Consumer Rights Act as a result of work in this House, and any surrounding law, which would rightly include any EU provisions.

Lord Stevenson of Balmacara (Lab): My Lords, further to that response, which I welcome, can the Minister spell out a little more how the review will operate, as information on that is still not available? It will presumably receive evidence. If it does, will it take oral and well as written testimony and, if that evidence is provided, will it be published so that we can all look at it?

Baroness Neville-Rolfe: I am grateful to the noble Lord for his questions. We have debated some of these points before. The chair will need to take a view on exactly how they run things. Clearly, the idea of a review is to have a wide range of evidence, and I think we will come back to the House on exactly how we organise that once we announce the review and the precise terms of reference. We have a short time for this, but it is good to have a focused review with an end date. We also need experience of how the new arrangements are working, as they only came into effect on 27 May. The review will be able to look at the summer of joy—the Ashes, the World Cup and Wimbledon, which is on at the moment—and see how the arrangements are working.

Women in the Workplace


11.25 am

Asked by Baroness Thornton

To ask Her Majesty’s Government what assessment they have made of the European Institute for Gender Equality’s 2015 index; and what steps they are taking to improve women’s quality of employment, and their participation and integration in the workplace.

The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con): My Lords, the gender equality index provides a measure of gender equality across the EU. The UK’s overall score in the 2015 index is above the EU average and based on data collected in 2012. We continue to make good progress, particularly in the domain of work, with more women in work than ever

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before, more women-led businesses and a gender pay gap that is the lowest ever and has been eliminated for full-time workers under 40.

Baroness Thornton (Lab): I thank the Minister for that Answer, but the Government should surely be concerned that the EU Institute for Gender Equality figures show that progress on gender equality in the UK has gone backwards in key areas. Yesterday the Chancellor had the gall to talk about equality for women in his speech but his Budget is going to hit women more than twice as hard as men. Where is the equality in the fact that, according to the Commons Library, 70% of the £34 billion in welfare savings in the Budget yesterday will come from women? What impact does the Minister think this will have on women and their participation in the workforce? Will the Minister commit to monitoring and publishing the impact of the Budget on women and work?

Baroness Williams of Trafford: My Lords, women will be able to avail themselves of the new living wage, which will help take women out of state dependency and into a very decent wage for the first time. There will, of course, be a tax-free allowance of £11,000 of which women will be able to avail themselves; an increase in free nursery provision from 15 hours; and an extended right to flexible working. I think that this Government have done more for women than any other Government in living memory.

Earl Attlee (Con): My Lords, did my noble friend notice the article in the Economist several months ago that urged a great deal of caution when using these rankings, because the results are greatly influenced by the methodology used?

Baroness Williams of Trafford: My noble friend is absolutely right that methodologies vary in different analyses. His comment also touches on the fact that these figures are quite often old ones. Those referred to in the noble Baroness’s Question go back to 2012, and much progress has been made since then.

Lord Kinnock (Lab): In introducing the new living wage, the Chancellor referred to the Resolution Foundation with commendation, and rightly so. Is the Minister aware that the Resolution Foundation made it clear that the living wage could be £9 an hour if working tax credits were maintained, but that without working tax credits it would need to be £12? Are we going to hear an announcement to that effect?

Baroness Williams of Trafford: My Lords, the Chancellor said yesterday that the living wage should mitigate the reduction in tax credits.

Baroness Smith of Basildon (Lab): My Lords, the noble Baroness said that women are better off under her Government than any other Government, yet all the independent analyses show that a woman who is a lone parent with two children and works earning the minimum wage—the living wage, as the noble Baroness now calls it—would gain around £400 from these changes but lose more than twice that from the other

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changes that the Government are bringing to tax credits. How does that help working parents stay in work? How does it benefit women?

Baroness Williams of Trafford: My Lords, the living wage helps everybody, including women, get a decent wage for going out to work. Free childcare certainly helps women who want to go out to work. Also, taking women out of tax for the first £11,000 certainly helps women get back to work.

Lord Dholakia (LD): My Lords, how are gender equality issues addressed in government departments? Is there an adequate system of monitoring and, if so, how are results published? If the results are not favourable, is it not time to invite the Equality and Human Rights Commission to audit to see why women’s representation does not reflect their presence in the community?

Baroness Williams of Trafford: The noble Lord asks a good question. The ONS monitors gender pay differences by department. I am very pleased that, in my own department, four out of seven of the senior executives are women, including the Permanent Secretary.

Lord Hamilton of Epsom (Con): Is there not serious evidence of inequality in that a far higher percentage of women are employed than men?

Baroness Williams of Trafford: In other words, we are going in the opposite direction. I think it is only a good thing that more women are employed in senior positions. This Government have made a real effort in that direction.

Baroness McIntosh of Hudnall (Lab): My Lords, would the noble Baroness have another go at answering the question from my noble friend Lord Kinnock? She implied that in some way the £9 living wage to which the Government aspire will mitigate the losses that people incur in the loss of tax credits, but she did not answer his question about the evidence which the Resolution Foundation put forward that, in fact, the needful figure would be £12. What is her answer to that question?

Baroness Williams of Trafford: I apologise as I only took one of the questions from the noble Lord. I have not read the report from the Resolution Foundation. I am happy to respond in writing.

Lord Lea of Crondall (Lab): Are the Government relying on a magic wand to introduce the living wage, or has the legislation that will be required been thought through, and when will it be announced?

Baroness Williams of Trafford: The living wage has been announced. I am sure that detail of its phase-in will be announced in due course.

Lord Beecham (Lab): My Lords, how will the imposition of the proposed increase of around £70 a week in council rents for households with a joint income of £40,000 a year in London or £30,000 elsewhere help to improve equality of employment and participation of women in the workforce?

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Baroness Williams of Trafford: My Lords, the introduction of those rents recognises that people on higher salaries should be able to play their part in contributing to rents.

Baroness Howarth of Breckland (CB): My Lords, the noble Baroness mentioned free childcare. As I understand it, free childcare will not come into operation until 2017 for those who are working the extra hours. How will that help families immediately, who will find that they are extremely short in a working week?

Baroness Williams of Trafford: My Lords, free childcare is already in operation. Its extension will be in operation in due course.

Baroness Smith of Basildon: My Lords, the noble Baroness said in answer to my noble friend that those on higher incomes should pay a higher rent, and she quoted the figure of £30,000 income for those outside London. That is the correct figure; we have read the figures. However, is she aware that that could be the joint income of two people on a basic living wage of £15,000 a year? Does she think that £15,000 a year is a higher income?

Baroness Williams of Trafford: My Lords, I did not quote that figure; it was the noble Lord, Lord Beecham. However, I recognise that those are the figures. This Government must balance the reduction of the deficit and growing the economy. Everyone has to play their part.

Lord Brooke of Sutton Mandeville (Con): My Lords, does my noble friend recall that the only occasion on which the wartime coalition Government were defeated on the Floor of the House of Commons between 1939 and 1945 was on an amendment to Mr Butler’s Education Act 1944 to the effect that, after the war, women teachers should be paid as much as male teachers? That amendment was moved by the late noble kinsman of my noble friend Lord Eccles. It was carried by one vote, but it was carried by Conservative votes.

Baroness Williams of Trafford (Con): My noble friend will appreciate that I do not remember it, but he demonstrates, as always, a very good point.

Baroness Walmsley (LD): My Lords, following the question from the noble Baroness, Lady Howarth, will the Minister say why the Government have pushed the introduction of tax-free childcare on by another year? Surely the watchword of this Budget was not “a Budget for security” but “jam tomorrow for hard-working families with children”.

Baroness Williams of Trafford: My Lords, I think noble Lords will agree that it is certainly going in the right direction.

Baroness Thornton: Will the Minister answer the question that I asked about monitoring? Since she and I disagree about the impact on women and working women, it is very important that the Government monitor and publish an impact statement on the effect of this Budget on women and work.

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Baroness Williams of Trafford: My Lords, as I said, the ONS publishes figures on the gender pay gap in the Civil Service. We are tasking companies with more than 250 employees to publish their gender pay gaps.

Energy Bill [HL]

First Reading

11.36 am

A Bill to make provision about the Oil and Gas Authority and its functions; to make provision about fees in respect of activities relating to oil, gas, carbon dioxide and pipelines; to make provision about wind power; and for connected purposes.

The Bill was introduced by Lord Bourne of Aberystwyth, read a first time and ordered to be printed.

Business of the House

Timing of Debates

11.37 am

Moved by Baroness Stowell of Beeston

That the debates on the motions in the names of Lord Patel and Lord Alton of Liverpool set down for today shall each be limited to 2½ hours.

Motion agreed.

Consolidation etc. Bills Committee

Membership Motion

11.37 am

Moved by The Chairman of Committees

That Baroness Andrews be appointed a member of the Committee to join with a Committee of the Commons as the Joint Committee on Consolidation etc. Bills.

Motion agreed.

Equality Act 2010 and Disability Committee

Membership Motion

11.37 am

Moved by The Chairman of Committees

That Lord Foster of Bishop Auckland be appointed a member of the Select Committee in place of Baroness Wilkins, resigned.

Motion agreed.

House Committee

Membership Motion

11.37 am

Moved by The Chairman of Committees

That Baroness Manzoor be appointed a member of the Select Committee.

Motion agreed.

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Palace of Westminster Committee

Motion to Approve

11.38 pm

Moved by Baroness Stowell of Beeston

That it is expedient that a joint committee of Lords and Commons be appointed to consider and report on the restoration and renewal of the Palace of Westminster in the light of the Independent Options Appraisal commissioned by the House Committee and the House of Commons Commission.

Lord Richard (Lab): My Lords, I think the House would feel that it is terribly important that there should be equality of representation on this committee between both Houses. That is true not only in terms of the number of people who are involved on both sides but in the offices that some of them will represent. I have heard it said that the Chairman of Committees will not be represented in the Lords representation on this Joint Committee. As I understand it, he performs in this House functions similar to those performed by an official in the other place who will be on the committee. In those circumstances, there seems to be a disparity between the representation of the two Houses. If that is so, will the Leader of the House undertake to make sure that something is done about it?

Lord Foulkes of Cumnock (Lab): My Lords, this is a matter of major importance and of potentially huge public expenditure. As far as I can recall, we have not had the opportunity of debating it in this House yet. I went to a presentation in Portcullis House, as did some other Members, organised by the Clerk of the Parliaments and the Clerk of the House of Commons. I must say that I found it totally inadequate: there were questions that could not be answered and the presentation was not clear. We need more information about exactly what options are being proposed.

I ask three things from the Leader of the House. First, to repeat the point made by my noble friend, representation should be equal between this House and the other place. A decision was made about the education centre, which has major implications for us, but we were not able to play any part in it—it was made by the House of Commons and forced upon us, yet the centre is effectively just outside our back door and will have a huge effect on us. Can we have an assurance that we will have equal representation on the committee?

Secondly, can we get an assurance that before any decision is taken that will affect expenditure and the workings of this House there will be a full debate in this House, and that no decision will be made without such a debate? Thirdly, I ask the noble Baroness to make it clear that the Joint Committee will consider all the options for dealing with this matter, not just those that have been put forward so far as a preferred option or preferred options. All of them should be looked at properly and thoroughly by the committee. This is a matter of great importance, and I find it very strange that it was almost put through on the nod.

Lord Grocott (Lab): To follow on from my noble friend’s point, on a related matter, he is quite right that this is an issue that affects both Houses of Parliament

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but there are many other issues, one of which is highly relevant, pertinent and newsworthy at the moment: English votes on English laws. It has been suggested that the rules relating to that could be made in the Commons without any proper joint consultation with Members of this House. There should be at least a Joint Committee of some sort to look at the implications for both Chambers of changes of this magnitude.

I do not use the word “disgrace” lightly, but it is a disgrace that we are making fundamental constitutional changes by an order in the Commons without any reference to us whatever. Changing the legislative process, in which we are intimately involved, unilaterally in one House without any consultation, let alone agreement, between the two Houses is unacceptable. I put it to the noble Baroness respectfully that she, as Leader of the House, has a duty to those of us here, particularly the Scots, not to allow our rights to be in any way diminished by any changes in the constitutional arrangements—at least, not without both Houses being fully involved.

Earl Attlee (Con): My Lords, returning to the subject of the debate, I urge my noble friend the Leader to carefully consider the need for full debate in your Lordships’ House before the committee does too much work.

Lord Lea of Crondall (Lab): My Lords, is the logic of what is being said not so much whether or not this or that decision is the correct one but that this needs to be a two-tier consultation exercise? The noble Baroness the Leader may care to say a bit more about the process of selecting who goes on to the Joint Committee, as has been said, but there are also some leading questions about the 40-year impact and so on that surely need to be brought back to the House for people to be able to comment on, when they have been considered more systematically by the Joint Committee, before final decisions are taken. It should not just be a question of saying yes or no to a report from a Joint Committee.

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): I am grateful to all noble Lords for the points that have been made in this short debate. I shall address the questions that have been put. First, on the membership of the committee, the Motion today sets the wheels in motion for a committee to be established. Membership of the committee is not yet finalised. I take on board the point made by the noble Lord, Lord Richard, about the quality of representation from this House and indeed its equality. We will put together a strong team to represent the interests of this House. Clearly, once I have had confirmation from the Commons of which people it intends to field on the committee, that will be reflected on before we finalise the membership of the committee as regards its representation from here.

On the way in which we proceed, there will certainly be equality in numbers on that committee, which will be a Joint Committee of both Houses. The intention is that the Joint Committee will be co-chaired by myself and the leader of the House of Commons, primarily so that we ensure—as I said when this matter was raised here a few months ago—that this House is in no

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way considered in any way subordinate when we discuss matters of this kind. I very much see it as my responsibility as Leader of this House to ensure that the situation that the noble Lord, Lord Foulkes, referred to with regard to the education centre is not repeated.

Once the committee is established, clearly we will want to interrogate very thoroughly the report that was produced by the independent consultants and published a couple of weeks ago. Ultimately, it will be for both Houses of Parliament to take the decision on the way forward on restoration and renewal, and I will certainly want to consider carefully the process between the committee being set up and its work starting, to the point at which we make a decision by way of a full debate and Division in each House. It is of course important that I and all others who sit on that committee from this House can properly understand and are able to take into account the views of Members as we carry out our work. Therefore I hope that I can give noble Lords the reassurance they are looking for in responding to those points.

On the point raised by the noble Lord, Lord Grocott, on English votes for English laws, I do not intend to divert from the topic of this Motion, but I refer him to the Statement I repeated in your Lordships’ House last Thursday, and to the points I made in response to the questions in that debate. The key point was that with regard to any decisions made in the House of Commons to change their procedures, whatever happens down there will not affect the authority or the processes in this House. However, the noble Lord, Lord Butler, has secured a Question for Short Debate next Thursday, and no doubt we will be able to discuss this matter further at that time.

Baroness Smith of Basildon (Lab): My Lords, on a point of clarity with regard to the first issue of the Joint Committee of the Lords and Commons, my understanding, from all the conversations I have had with the noble Baroness the Leader of the House, is that there will be completely equal representation between both Houses. I think that she has heard the mood of the House—that is what this House expects. I think she said that that was likely, but she did not give the guarantee that the House is seeking. Can I therefore press her, because that is my understanding of the present situation anyway, to give a guarantee that there will be equal representation between both Houses?

On the noble Baroness’s second point, in which she responded to my noble friend Lord Grocott, as much as we welcome the QSD in the name of the noble Lord, Lord Butler, next week on 16 July, that does not replace the need for a proper debate on the proposals for English votes for English laws, which impact on the work of your Lordships’ House. It is all very well for the noble Baroness to say, “We are not affected by it”, but we are. It affects how legislation is conducted in Parliament, and we are part of that process. I know that when she responded to the debate on the Statement the Government made last week she rejected the notion, but she will have heard that noble Lords across the House are very concerned at the lack of debate in this House on that issue, and I urge her to reconsider. It is the view of the Official Opposition and, I think, of other noble Lords around this House,

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that there should be a full debate, perhaps on a Motion that can be divided on as well. To deny this House the opportunity to debate this in government time is totally unacceptable.

Lord Butler of Brockwell (CB): Further to the point made by the Leader of the Opposition, I understand that in another place the Government have decided not to go ahead with the changes to Standing Orders next week but to have a two-day debate on them. Does that not strengthen the case for there also being a full debate in this House, in addition to the Question for Short Debate?

Baroness Stowell of Beeston: Coming back to the topic of this Motion, I make it clear to the noble Baroness and to the House that it has been my view that the membership of the restoration and renewal Joint Committee should be equal in numbers and in approach in terms of this House and the other place. I am just waiting for the House of Commons to confirm its approach before we finalise our own because I am trying to achieve exactly that aim—making sure that there is a proper balance in the way that the Joint Committee is formed. I hope that that gives the noble Baroness and the House the assurance that they are looking for. Therefore, we will be equally represented in number, and I might even suggest to your Lordships that the team of members from this House will be more powerful and more authoritative, because, quite frankly, that is what I think we are.

I note what the noble Lord, Lord Butler, said about the decision in the House of Commons regarding English votes for English laws, but I say to him, as I say to the noble Baroness and to the House as a whole, that the House of Commons is debating changes to its Standing Orders.

Lord Foulkes of Cumnock: That will affect us.

Baroness Stowell of Beeston: I note that a noble Lord said from a sedentary position that that will affect us. However, the processes and procedures of our House will not be affected by any changes to the Standing Orders in the other place.

Motion agreed.

Financial Assistance to Opposition Parties and the Convenor of the Cross-Bench Peers

Motion to Approve

11.51 am

Moved by Baroness Stowell of Beeston

That, in the opinion of this House—

(a) with effect from 8 May 2015, the resolution of the House of 24 June 2010 (financial assistance to opposition parties) shall cease to have effect; and the resolution of the House of 30 July 2002 (financial assistance to opposition parties) shall have effect from 8 May 2015 as it would have done if the resolution of the House of 24 June 2010 had not been passed, and

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(b) with effect from 1 April 2015 the resolution of the House of 30 July 2002 shall have effect as if paragraph (2)(a) provided for £87,761 to be the maximum amount of financial assistance which may be given to the Convenor of the Cross-Bench Peers for the year beginning with 1 April 2015; and paragraph (2)(b) of that resolution shall apply in relation to each subsequent year accordingly.

The Lord Privy Seal (Baroness Stowell of Beeston) (Con): My Lords, it may be helpful if I explain the background to this Motion. As noble Lords will know, since 1996 this House has agreed to provide a sum of money to be set aside for the two main opposition parties in your Lordships’ House and, since 1999, has provided the same for the Convenor of the Cross Benches.

As your Lordships may also recall, in June 2010 we put into abeyance the funding available to the second-largest opposition party, because the Liberal Democrats formed part of the coalition Government following the general election. Now, the coalition Government are no more. The first limb of this Motion recognises that fact and returns us to the situation as it was before the 2010 Parliament, allowing the Liberal Democrat group to draw down funds to discharge its responsibilities as the second-largest opposition party in this House.

The effect of the second limb of the Motion is to adjust the amount of funding available to the Convenor of the Cross Benches to provide the resources needed for him to operate an office with two full-time members of staff. The Motion is silent on the funding available to the Official Opposition. I should say for clarity that that is because the funding arrangements for Her Majesty’s Official Opposition on the Labour Benches remain unchanged.

Overall, the two limbs of the Motion seek to allow this House to continue to undertake the important work that it is here to do, and I am pleased to have worked constructively with the leaders of both main opposition parties and the Convenor in bringing them forward. I beg to move.

Lord Pearson of Rannoch (UKIP): My Lords, I have given the noble Baroness the Leader of the House notice of this intervention, which arises because I understand that this Motion, if we pass it, will give taxpayers’ money—Cranborne money, I think it is called—to the Liberal Democrats to help them to run their affairs in your Lordships’ House and perhaps elsewhere. If so, I suggest that your Lordships do not pass it until we have agreed an appropriate award of finance for my party, the UK Independence Party.

I ask this against the background of the admittedly unwise policy of the previous coalition Government, which I understand was inspired by the Liberal Democrats and to which I gather they still adhere. That committed the Prime Minister to recommend new Peers to Her Majesty in proportion to the votes cast in the previous general election. That policy would have given the Liberal Democrats some 43 Peers in your Lordships’ House, from their 8% share of the votes cast in May. In fact, they enjoy 102 Peers. Should this situation not be set against UKIP’s present three Peers, from our 13% share of that vote? Under the previous Liberal

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Democrat policy, we should have 69—so they have 59 more Peers than they should, whereas we have 66 fewer. I trust your Lordships will agree that we should have at least some Cranborne money to help us with our work here.

Noble Lords may be aware that I am in correspondence with the Prime Minister to adjust the present injustice by recommending a number of UKIP Peers to Her Majesty. I trust that we can revisit this matter, if and when that happens. I am not entirely confident that we will get a decent number of Peers, but surely masters cannot go on being so unfair to Molesworth for ever—or can they?

While I am at it, since 185 Peers joined us in the last Parliament, with none for UKIP, and we are already somewhat cramped for space, would not one sensible solution be for, say, 30 Liberal Democrat Peers to stand down? That would free up a share of Cranborne money for UKIP and give us all rather more space. Would not that kill two birds with one stone? I look forward to the Minister’s reply.

Lord Dholakia (LD): My Lords, if I may, I will respond very briefly. I do not think that the matter relates to how many Liberal Democrats are here. The fact remains that there are almost 102 Liberal Democrats, which has been recognised by the noble Baroness the Lord Privy Seal in the resolution that she has put before us. The intention is that we would perform as the second largest opposition party in this Chamber and, accordingly, we welcome the contribution being given to us as part of the Cranborne money.

Baroness Stowell of Beeston: I am grateful to the noble Lord, Lord Pearson, for giving me notice of his intention to contribute on this Motion. He makes his presence felt in your Lordships’ House, and he and his UKIP colleagues are an important part of the membership of this House. However, as I think he will know, the Cranborne money is provided for opposition parties in this House on a formula that is very different from the way in which Short money is provided in the House of Commons. It is very much based on the size of the opposition parties in this House and not reflective in any way of popular vote share or seats in another place. He may wish that matters were different in this House when it comes to numbers—I recognise that his view is widely shared; I made that point when responding to questions last week—but we have to deal with the situation that we find ourselves in. Following the appropriate discussions in the usual channels, this Motion returns the level of funding for the second-largest opposition party in this House to what it was, in proportionate terms, before 2010.

I am not going to comment on the noble Lord’s wish that there be more UKIP Members in this House. The Cranborne money is provided for the opposition parties to operate a Front Bench. I am not sure that the noble Lord, as effective as he is, is in a position to provide the range of posts that might lead UKIP to become a significant strength in terms of a shadow Front Bench in this House, but I am grateful to him for all that he does, even though his numbers are limited at this time.

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Lord Pearson of Rannoch: My Lords, I am most grateful to the noble Baroness. The answer to her last point is that that rather depends on how many UKIP Peers arrive in this place and who they are. I simply make the point that I do not think that it is right that the first and second opposition parties should have some financial assistance here. So should the Greens, so should we all—maybe just a little; maybe just to pay for one tiny, little secretary. That would be very helpful.

Baroness Stowell of Beeston: As I have said, the point of Cranborne funding when it was set up was to enable the main opposition parties, both the Official Opposition and the second-largest opposition party, to operate a Front Bench. It is not based on numbers. The proportion provided to either of those parties is not affected by their electoral performance in different elections. After the 2005 election, when the Liberal Democrats—I am not sure whether they would like me to remind them of this—did better then than they did in 2015, their proportion was not affected. The Cross Bench receives a smaller allocation in order for it to have some secretarial support but, clearly, if we were to base it on numbers, we would see that the Cross Bench is larger than the Liberal Democrats. The way in which the money is divided shows the purpose behind it in the first place.

Motion agreed.

National Health Service: Sustainability

Motion to Take Note

12.02 pm

Moved by Lord Patel

That this House takes note of the sustainability of the National Health Service as a public service free at the point of need.

Lord Patel (CB): My Lords, it is a great pleasure to open this debate. I was a little concerned that, because of today’s Tube strike, our numbers might be devastated, but I am pleased to see that they are not—too much.

I am grateful to all noble Lords who will be taking part, many with a long experience in health. I am particularly delighted to see the noble Lord, Lord Mawhinney, in his seat and taking part in the debate.

Health is determined by a complex interaction of individual characteristics; lifestyle; and physical, social and economic environment—that is, your genetics, your epigenetics and your lifestyle. To keep the citizens of a nation healthy needs a strategy with appropriate policies and resources to address all these interactions. A system that keeps the citizens of a nation healthy needs to be a partnership of individuals, the wider community and the state.

While the state has a role in all aspects of health—prevention, healthcare and social care—the limits of that role have to be clearly defined and can be arrived at only by a wide consensus that includes the public, wider stakeholders and the state, each recognising and accepting their responsibility. What we have today in the NHS is primarily a service that treats patients when they are ill—some say a “sickness service”. It is

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clear that, when it comes to prevention, both the state and the individual need to do more—and I would say that the individual has a greater responsibility.

The consequences of not tackling disease prevention are grim, in terms both of individual misery and state resources. It is also clear that a changing demography—with a population increase—and increasing life expectancy will lead to an increase in the number of people needing social care.

The association of lifestyle with disease is well known, and yet in the UK 70% of the population is inactive, and 26% is obese, which will increase to 40% by 2025. This will result in 4 million people with diabetes. Some 70% of the population have poor diet and 21% smoke. Some 27% of men and 18% of women drink alcohol well above the safe limits. Some 40% of disease is related to lifestyle, including cancers and Alzheimer’s. The scale of preventable illness is staggering. An effective national plan—dare I say, which we do not have—for preventable illness could reduce mortality by 25% by 2025. Otherwise, the impact of lifestyle-related diseases and changing demography will put an even greater strain on resources.

The projected scenario is that there will be, apart from diabetes, 2.9 million people living with a long-term condition and 4 million living with cancer. By 2026, 1.4 million people will have dementia, costing about £3.5 billion a year. Some 4.5 million people will need help with daily living and 17 million people will have arthritis and other joint conditions. Providing social care will take a greater proportion of resources. The cost of care alone could consume 2.5% of GDP. A survey that showed that only 26% of older people think that they need to make provision for their social care demonstrates a lack of public concern and involvement.

I now come to the current state of the NHS: the care part of the health equation. The founding of the NHS, 67 years and four days ago, was heralded as a great piece of social legislation—and so it was. The public’s love affair with it has not diminished. At its launch, the annual budget was £280 million. In 2013-14, the NHS spend was approximately £116 billion—close to 9% of GDP—and the pressure on resources continues. The demand for care is not diminishing. Financial problems are now endemic among NHS providers. Even the previously best-performing trusts are heading towards deficit. Some 89% of trusts are forecasting deficits, faced with increasing demands, cuts in tariffs and the withdrawal of performance payments. Provider deficit could top £20 billion this year. The FiveYear Forward View of Simon Stevens was a commendable document that I will return to later because it tries to address some of these issues. It predicts a need for extra funding of £8 billion a year by 2020-21. I know that the Chancellor yesterday said that he will fund it by £10 billion—but he included £2 billion already given to the NHS.

At the same time, the service has delivered already in the last Parliament £20 billion-worth of efficiency savings, mostly through limiting staff salaries, cutting administration costs and the lucky break of blockbuster drugs coming off patent. An ambition to deliver further

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efficiency savings of £22 billion a year by 2020-21 through productivity gains of 2% to 3%, if it can be achieved, will be challenging. Further reducing staff salaries and holding pay to 1% for the next four years, as announced yesterday, and reducing the price paid for treatment is an option likely to lead to a further decrease in morale and less commitment from staff, leading to poorer-quality care, poorer outcomes and, dare I say, less likelihood of getting the productivity gains proposed.

Historically, the NHS has never achieved productivity gains above 0.4% year on year. Achieving productivity gains of 1.5% will result in a shortfall of £16 billion; there will be a £21 billion shortfall if the gains are only 0.8%. In this scenario, the NHS will need an annual budget of nearly £200 billion by 2030 and one-fifth of the nation’s entire wealth by 2060.

The current financial pressures are despite more than 20 major reorganisations and policy changes, mostly to cut costs, over the past 20 years—and these continue. Most recently, further policies to cut costs include: the reversal of safe nurse-to-patient ratios; the removal of some clinical targets; reducing the cost of agency nurses; and reducing the cost of having consultants and the pay of senior managers. The recent Carter report addresses efficiency and productivity gains that could—I use the word “could” because that is what the document says—save £5 billion in procurement per year. We have had three previous reports on procurement in the NHS.

Not only do we have financial pressures but the performance of the NHS in terms of outcomes is not good. Although the NHS is rated very highly by the Commonwealth Fund for several parameters—no doubt the Minister will remind me about that—it is also rated second from bottom for avoidable deaths. Recent similar findings have been reported in a Health Foundation report for cancers, vascular disease and lung disease. There are 25,000 excess deaths associated with diabetes and 2,000 child deaths can be avoided. There is great variation in care throughout the country.

Primary care does not fare any better, with long waits for appointments in some areas, late diagnoses leading to an increased number of deaths, and a dwindling workforce. It is difficult to see how a seven-day service in both the primary and acute sectors can be delivered without higher costs, with patients with long-term conditions resorting to attendance at A&E because of the lack of community care. The separation of community care from hospital-based services and social care inhibits integration, makes the delivery system weak and fragmented, and thwarts innovation in care. The NHS has never been great at innovating for service delivery. While I accept that not all is bad in the NHS—we must not throw away all the good things that it has—the system as a whole is not performing well.

Is the current system sustainable? There are some who would say, “Yes, but it needs more resources”. Others would say, “Yes, if only we can produce the efficiency and productivity that is there to be had. It needs to improve”—there is room to do so, I agree—“and cutting waste will solve some of the problems”. Others feel that we need to look for a new settlement, for more durable, long-term solutions that will keep the

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citizens of this nation healthy for as long as possible in their life—a new system where prevention, care and social care are a continuum; in which the individual, the community and the state have a commitment and a shared responsibility; where people with long-term conditions are able to manage their own illnesses; where individuals plan for their own health and are helped to plan for their social care if they need it; and which can adopt new ways of care and embrace innovation.

The history of the past two and a half decades tells us that political parties will continue to manage the health service according to their ideology—managing scandals and giving a bit more money—but with no long-term planning as there will be no political consensus. We need a wider dialogue with the public, stakeholders and politicians to explore a new settlement, a new way of delivering care and social care, and, above all, a strategy to prevent illness. We need a national consensus that recognises and accepts that individuals, communities—including employers—and the state have a role in health and contributing to it. To do this, we need an independent national commission that is free to look at all the issues, not just at financing the service. The current system is not sustainable. I have no doubt that changes will be brought about. If we persist in the same way as we have done for the last 20 years we will see a gradual shift to a two-tier system: those who can pay will get care; those who cannot will not. The variations in care will get wider.

I hope that today’s debate can start a wider conversation. If that happens, I, for one, can imagine that the logical conclusion will be that we need an independent commission to explore a new way, a new settlement for health that is compassionate and caring, and where all citizens have a stake to contribute to make their life healthier. I think that Simon Stevens’ FiveYear ForwardView is a good strategy and a good point on which we can build.

I have two simple questions for the Minister. First, does he agree that the current system is unsustainable? Secondly, does he agree that all I have said about current and future scenarios is true? I beg to move.

12.16 pm

Lord Fowler (Con): My Lords, first, I congratulate most sincerely the noble Lord, Lord Patel, on his speech and on the debate. He talked about exactly the kind of issues that we should be talking about, and which the public generally should be talking about. As he might imagine, what he said about a commission was music to my ears. We should take note of what he also said about the financial problems in the NHS, which are endemic.

It is spending not just today about which we should be concerned—although I congratulate the Chancellor of the Exchequer on the resources he has made available—but spending in the future. For far too long, there has been a political preoccupation with structures and organisations to the extent that today there cannot be one person in 100 who could say how the National Health Service is actually organised. That includes quite a number of people working in the health service.

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I hope that the debate can now change and tackle the obvious problems that we face. The principal one is clear. We all want a health service free at the point of delivery so that people are not denied healthcare because of a lack of income. That is basic. However, we also know that the costs of the health service are increasing because of medical advance, rising expectations and an increasing elderly population. The question is: how can we finance this increasing demand? That is an appropriate question on the day after the Budget. It is also appropriate because it seems to me that the dangers are clear. We are funding health through general taxation but what is crystal clear is the pressure on public spending. That pressure will continue. At the same time we find that large areas of public spending are exempt from economies and reductions. Health, of course, is one of those and 60% of social security spending is another.

The Government are forced to look at the areas not protected for reductions, such as the 40% of the social security budget. It is for such reasons that they are driven into eccentric policies, such as putting the costs of the over-75s television licence fee on to the BBC. I say “eccentric” although I could put it rather higher than that—I might on Tuesday when we debate this issue. The fact that the Government are driven to such policies shows just how uncertain the position is. It raises the question of whether public spending will be sufficient to meet the emerging needs in the long term, and whether we can keep going on the same basis and keep going back to the same departments to make economies.

I raised that issue in the Queen’s speech debate, but received what I term a dusty ministerial reply from the first Conservative Government for nearly 20 years, which was that Derek Wanless had gone into all these issues a few years ago. I find it slightly odd that the Government should rely on a report commissioned by Gordon Brown, published in 2002 and prepared by Derek Wanless and the health trends review team of Her Majesty’s Treasury. It is particularly odd when you consider that the report looked at the resources required, but said quite explicitly:

“Its remit was not to look at how those resources should be financed”.

It also said that there should be further and regular reviews.

To my mind—and I very much echo what the noble Lord, Lord Patel, said—what is required at the start of the new Parliament is a thorough, independent and authoritative review of the financial pressures that the health service will come under, and at the same time to set out the options for financing healthcare. We may find that funding it out of general taxation is the best and most cost-effective method—I certainly argued that it was a cost-effective service when I was Secretary of State—but we cannot have a sensible debate on the way forward without examining the other issues. We could have a ring-fenced health tax, or look at a potential system of health insurance. We should explore the part that charges could play: I always found it extraordinary that, for example, prescription charges caused so much upset, given that about 70% were prescribed absolutely free. We should look at economies that can be made in the drugs bill and a whole range of other things.

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These are difficult questions, particularly given how health is exploited as a political issue—any change is alleged to mean the destruction of the heath service as we know it—but they are options that should be explored. That is why I believe that a royal commission, made up of independent members and working quite openly, would be the way forward. It would look at the resources needed to deliver a high-quality health service that is free at the point of delivery, but also examine how those resources should be financed. I am sure that many will say that this cannot be done and that it is politically too difficult. Frankly, however, we have an exceptional opportunity, at the beginning of a Parliament, to mount a thorough and open investigation into the financial pressures that the health service is and will be under and how they can be met. That would be supported by those who are concerned about not just the state of the health service today, but its future over the coming years. I very much hope that this is a challenge the Government will not duck.

12.22 pm

Lord Turnberg (Lab): My Lords, I, too, congratulate the noble Lord, Lord Patel, on introducing this important debate in such a powerful and impressive way. I, too, resonate very much with the idea of a royal commission. Indeed, I suggested it some time ago in a previous debate.

When the noble Earl, Lord Howe, was Health Minister he must have got used to me banging on about the parlous state of NHS finances, so I see no reason why I should not continue that theme with his esteemed successor, the noble Lord, Lord Prior. But I say at the outset that I do not go along with the “black hole” or the “bottomless pit” theory that we will never be able to fund the NHS adequately. The bottomless pit argument is faulty because, while we may not be able to afford everything that everyone wants, we can and should afford what they need. That is, we can afford a service that is widely regarded as satisfactory and which can meet all reasonable expectations at a reasonable level. Indeed, many countries manage to do this very well.

However, it is clear to virtually all observers that we are not in that position now. We are falling behind. I look back to the halcyon days of the previous Labour Government, when, by 2010, we were putting in almost 9% of GDP, we had got rid of the waiting lists, accident and emergency waits were down, GPs could be seen on the same day and patient satisfaction was high. Now we have problems in all those areas. We have cut the share of the national cake from more than 9% to around 7%. I understand the need for austerity measures, but may I ask the Minister: what is the justification for reducing the proportion of GDP spent on health? Bringing the share of GDP up to a reasonable level is something a country with as high a GDP as ours, and more billionaires per square inch, can afford. All the problems due to these stringencies have, of course, been spelt out in reports from the King’s Fund, the Nuffield Trust and the health service managers who are heading for huge deficits this year. I fear that these are just the conditions in which research and

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innovation are squeezed out. As the scientific adviser of the Association of Medical Research Charities, I find that particularly disheartening.

Of course, I recognise that there are more efficiency gains to be made. I want to provide one or two examples where the system under which the NHS labours is causing a terrible waste of money, and where efficiency has gone out of the window. I have a friend who is a distinguished gastroenterologist and who is desperately trying to do his best for his patients and at the same time save money for the NHS. Here, I must express my interest as a one-time gastroenterologist way back in the dark ages. My friend was trying hard to fulfil one of the major requirements of NHS England—to move much more care out into the community and reduce the cost of hospital care—so he started running out-patient consultations by telephone instead of bringing the patients up to the hospital. That saved them much time and effort, and they loved it. He also knew that the tariff paid by the CCG for each out-patient consultation was around £150, while a telephone or face-time consultation cost £29. That is a considerable saving to the NHS and a win-win situation. However, noble Lords might imagine how that was perceived in his trust. He was called in to meet a middle manager, who told him in no uncertain terms that he must stop this because the trust could not afford to lose the funding that his activities were causing, so he stopped for a while but has reintroduced the practice surreptitiously and is waiting for the trust to call.

My friend also wanted to set up a one-stop clinic for patients needing endoscopies, seeing them in the morning, treating them the same day and giving them their results later the same day. This saved patients waiting 12 weeks for an endoscopy and three more weeks for the results—just what the NHS should be about: efficient, convenient service. But again, the incentives for the trust got in the way. Trusts lose money when patients attend only once instead of three times.

I doubt whether this is a unique phenomenon, and it is a clear result of the disincentives we have set up in the internal market. So long as providers are desperate for funds from purchasers, we will run into this type of problem. So my question for the Minister is: is the internal market broken and counterproductive, and, especially when we are under such financial constraints, would not an integrated budgetary system be more suited to our needs? How do the Government envisage achieving their objectives of integrating community and hospital care, hitting savings targets and improving the care of patients while we have this dysfunctional internal market? The question is not whether we can afford a health service free at the point of delivery but whether we can afford one that is hidebound by disincentives in the way I have described. I look forward to his response.

12.28 pm

Baroness Emerton (CB): My Lords, I, too, congratulate my noble friend Lord Patel on securing this debate and on his timely contribution.

I refer back to the 1942 Beveridge report and the six years it took for the politicians to agree the NHS Bill and launch the NHS. I have been privileged to serve

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the NHS for 60 years, during which time many reports have been published proposing changes to meet the needs of the times.

I looked back to 1948—three years post-war—when ration books were still in use and young men were called up for national service. One thing was very apparent in 1948—the NHS would not have to deal with obesity. My thoughts wandered further and I wondered if the Minister might consider treating the national obesity problem by reintroducing rationing and national service—one way of improving the general health of the population, but I fear it would not be too popular.

Since the inception of the NHS, much progress has been made in diagnostics and the treatment of disease, alongside progress in the fields of medicine, nursing, midwifery and professions allied to medicine. There have been changes in the management of the services, usually heralded by the dreaded word “reorganisation”. Some of these have been for better, and some for worse. The nursing and midwifery professions have had their share of changes in regulation, education, practice and management; again, some for better, and some for worse. I believe the nursing and midwifery professions have in fact weathered the changes with positive outcomes. Nurses always rise to the occasion and many might describe them as unsung heroes or heroines because they always go the extra mile, not just because of the NHS constitution or their code of conduct, as important as those are, but because they really care about the delivery of care to patients. However, the two professions are generally poorly understood, as explained in the recently published book by Davina Allen, The Invisible Work of Nurses. She writes:

“There is a widely held view that all systems tend towards disorder and that energy is required to maintain order. Nurses are the source of this energy in healthcare. Formal organisations have a tendency to overestimate their orderliness and the degree to which their activities are governed by rational systems and processes. Yet in so far as healthcare exhibits any order, the findings of this study show, this must be understood as a nursing order”.

It is timely for me to pursue this a little further as there is a great risk, as Ministers and the Government make decisions quickly in order to deal with the current financial issues, in looking for quick ways to solve the problems. In the current situation, the role and complexity of the work of nurses and midwives is poorly understood, especially the role of the registered nurse. There is categorical evidence that degree-level education of nurses is associated with lower mortality rates in hospitals. Suggesting that another level of registered nurses might be the answer ignores all the previous research, which demonstrated that the state-enrolled nurse was “abused” and “misused”. This was to the detriment of safe care to patients and unfair to the enrolled nurses, who were placed in impossible positions, leading to many mistakes. The opportunity to develop further the roles of the current workforce would be more appropriate, in order that new models of care could be introduced to assist in developing new pathways of patient care—integrated care, for example. The support to the registered nurse is vital, as is the work currently being undertaken by the noble Lord, Lord Willis.

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Planning the nursing and midwifery workforce in a time of national economic difficulty and ensuring the safety and delivery of high-quality care is not an easy task. But it is imperative that it is guided by a proven evidence base. If the outcome is unaffordable then difficult decisions have to be made as to the level of service that can be provided, or money found to meet the costs. These are hard decisions but it is better to be safe than sorry. Another Mid Staffordshire, Winterbourne View or Morecambe Bay cannot be afforded and it would be wrong to exploit the nursing and midwifery professions against an evidence base. The largest single workforce in the NHS cannot be expected to sacrifice its professionalism for a political expediency at a high risk to patients. The Chief Nursing Officer, who is leading this piece of work, needs the full support of the professions and the understanding of the politicians. Where would the NHS be without the seven-day service given by nurses and midwives now and in the future?

12.34 pm

Baroness Gardner of Parkes (Con): My Lords, I add my comments to others that it is a great thing that the noble Lord, Lord Patel, has brought forward this debate today. As a former dentist, I was the first woman to be appointed to the former Standing Dental Advisory Committee for England and Wales, and later a member of the General Dental Council. As one of the very few dentists in the House, I felt that I should make one or two remarks about dentistry.

I was very disturbed to see the news that Manchester has a serious problem with children requiring full clearance of their deciduous teeth under general anaesthetic. The cost to the local NHS budget is a serious issue and a bed shortage has been created because these children are being hospitalised for a considerable time. I have suggested in this House that such cases could be dealt with in day treatment centres, but as a result I have received some quite abusive emails about the risks that would be created for these children in substandard clinics. Why should they be substandard? I am suggesting a day centre that really is right up to standard.

I have just had cataract operations in a day surgery and they were splendid. The operations were done in a first-class specialist London hospital, the Western Eye Hospital in Marylebone, although I am sure that there are many such hospitals. Some of the operations are done under local anaesthetic and some under general anaesthetic. As patients we spent a day at the clinic and did not take up any beds. I met some people having their second operation whom I had seen when they had the first one, and when we compared notes we saw that we had all made good recoveries. A day centre that is fully staffed with a competent general anaesthetic specialty available would be so much better, not only in terms of saving money for the NHS, but also for children and their families. It is quite frightening for a small child to be stuck in a hospital for a night, so to do so unnecessarily and at great expense is, I think, really too much.

I want to make one other point about Manchester. When the city gets all these new powers, I hope that it also gets a bit of sense. The real problem with Manchester in dental terms is that there is a great deal of opposition

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to the fluoridation of the water supply. I ask Questions about this subject all the time. The worst performer in the whole of the UK, according to the decayed, missing and filled teeth index, is Manchester, while Birmingham is the best. The Question I ask every so often to keep it before the House is this: what is the difference in other health patterns between Birmingham and Manchester? There is no difference. The really significant difference is to be found in people’s dental condition. Fluoridation could result not only in much better prevention, as advocated by the noble Lord, Lord Patel, it could also mean the saving of a great deal of money and easing of pain and discomfort for the children who are going through such a bad time at the moment.

I agree with the noble Baroness, Lady Emerton, about nursing—I have always had a bit of a thing about this. State enrolled nurses were a very valuable force in this country. Speaking as a former chairman of one of the big London teaching hospitals, I know that some of our best nurses were state enrolled nurses. They were often people who could never have met the academic standards now required for the only qualification we have for full-time trained nurses. We now believe that they should all be university graduates. This means that we are devaluing the caring element of nursing, but I think that there is a place for it. Everyone wants to be called a nurse; no one wants to be known as a care assistant. We should definitely keep up a medium standard of training. Indeed, the Minister who answered a Question for Oral Answer earlier today said that he had views about this issue and that it probably would come back again. I hope that that is the case.

I would like to have retained free dental examinations. In your Lordships’ House, I won a vote on an amendment on that which then went to the Commons, where they attached financial privilege and we were not allowed to debate it again. Had we retained free dental examinations, we would have picked up so many oral conditions so much earlier. Lots of people would have been saved horrible deaths from mouth cancer and others would have known that it was time to go. Even now, I believe that in any day centre that we have, someone should be looking quickly in your mouth and, if there is something abnormal, telling you to go in for a proper consultation. These things are just handled too casually.

There is so much that can be done. It can be done sensibly and well, and does not have to cost a fortune. This is an excellent debate today and anything we can do to make the NHS more sustainable is very welcome.

12.40 pm

Baroness Masham of Ilton (CB): My Lords, I thank my noble friend and congratulate him on instigating this debate, which is necessary but of great concern. I must declare an interest, as I use the NHS and it saved my life after a traumatic injury. Sustaining the NHS is vital but it has many challenges. There are so many demands on the service, which is struggling to keep its head above the water.

What can be done about the PFI hospitals? They are getting into serious debt, and is it not a fact that they may have to pay out more? This would be a

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disaster. Some of these hospitals are cutting services relating to patient care and closing wards to try to save money.

There are many more demands on the service as the population grows older. Money needs to be saved so that it goes to patient care. If one looks at the lists of well-paid managers, many of those posts could be merged, saving money. Something must be done to make locum doctors and nurses’ posts cost less. It has got out of control. It is vital to have good, well-trained front-line staff, but if too many are from agencies it means that there is not continuity of care, which is so important. Perhaps hospitals could have their own staff banks. I agree that patients must take responsibility for their hospital or GP appointments but they must be able to contact the hospital or surgery. This can be difficult. Communication throughout the NHS should be improved.

I feel that it is such an expense to the NHS when things go wrong. Patient safety should be top of the agenda. I hope that the duty of candour will help. There has been a culture of cover-ups for too long, which I hope will be changed to one of openness and honesty. An apology and correcting the mistake is often what is needed and that would help to lessen the need for litigation, which costs the NHS far too much. However, compensation should be paid when there is disability which is very expensive to live with.

On Monday, I attended a meeting on orphan drugs and rare and ultra-rare conditions. We discussed the extreme stress that parents and loved ones have when their family member is denied a drug which can save their life or improve its quality. There should be co-operation with charities, the NHS and industry working together to find ways of funding these vital drugs. I wish that the Prime Minister would help over this matter. He is a person who understands these very heartbreaking situations of life and death. There should not be discrimination for the people who need the NHS more than anyone.

Multidrug-resistant bacteria result in extra healthcare costs and productivity losses of at least €1.5 billion per annum. Each year, about 25,000 patients die in the EU from an infection caused by multidrug-resistant bacteria. London has been named the capital for TB in Europe. It is a serious public health and economic threat, demanding a concerted response.

As president of the Spinal Injuries Association, I end by saying that delay in admittance to a spinal cord injury centre when there is a spinal injury with paralysis can lead to an increased risk of acquiring avoidable complications such as pressure ulcers, contractures and infections. These secondary complications not only are an additional health hazard to the patient but have been shown to result in longer lengths of stay and present a real risk to the functional outcome for the patient and an extra cost to the NHS. NHS England should be doing more to help and should communicate better with the specialist units, which do a difficult job and need a boost to their morale.

12.46 pm

Lord Warner (Lab): My Lords, I, too, congratulate the noble Lord on securing this timely debate. As usual, his analysis was impeccable and very much to

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the point. We have just completed an election campaign in which undying love was professed by all the parties for the NHS and more money was promised—£8 billion to be precise, as the Chancellor said yesterday, for the period to 2020. Nevertheless, we have to move quickly now to tackle the rapidly deteriorating NHS finances, even with an extra £2 billion in prospect for the current financial year. We must also seriously up the tempo of service reform, because we have a linked cash and care crisis.

On the care side, we at least have a plan—the five-year forward view—and a chief executive capable of implementing it, if he is allowed to do so. But the NHS has to be turned round very fast indeed, with much more emphasis on preventing ill health and much more care and treatment being provided in the community rather than in hospitals. Staff need to work in radically different ways, with much greater use of technology by a too-often luddite NHS. The budgets and care delivery of the NHS and social care must be integrated rapidly, both nationally and locally. Unchanging and failing providers have to be replaced much faster than we have been willing to do so far, with a willingness to use competition to do this. It is worth remembering that 60% of the public simply do not care whether their NHS services are provided by the public or the private sector.

The key question now is whether the five-year forward view will resolve the NHS’s major productivity problem, whereby it produces the wrong services in the wrong way and in the wrong places. It needs an annual productivity gain of at least 2.3% stretching over the next decade. The best it has achieved in any recent year is 1.5%, and the average for the last Parliament was under 1%. Most of that was achieved by curbing staff pay, a policy that is to be continued for the rest of this Parliament. The acute and specialist hospitals are the worst offenders, with an annual productivity gain averaging 0.4% over the last Parliament—do not believe me, believe the Health Foundation.

Unconditionally pumping more money into an unreformed NHS is probably the worst thing any Government could do, not least because the public have rumbled NHS inefficiency. The 2014 British Social Attitudes survey shows that over half the public thought the NHS wasted money. They have not yet rumbled the NHS’s track record on avoidable deaths that the noble Lord, Lord Patel, pointed out.

We must always remember that the best predictor of future behaviour is past behaviour. The jury must definitely be out as to whether the NHS, even under its new leadership, is capable of delivering, or willing to deliver, the £22 billion of productivity gain by 2020 promised in the five-year forward view and now apparently being relied on by the Government.

If the NHS fails, as I think it will, do the Government increase borrowing, cut other public services further or raise taxes? Without any of these, they will have to face up to finding new streams of revenue or reducing the NHS service offer. Those are the hard facts of economic life. Even if—it is unlikely—the Government manage to wriggle their way through to 2020 without making hard choices on the NHS, the Office for

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Budget Responsibility forecasts show that the NHS financial challenges will last very much longer than this Parliament.

Our tax-funded, largely free at the point of clinical need NHS is rapidly approaching an existential moment. The voices of dissent and outrage will no doubt be deafening but a wise Government should begin now the process of helping the public engage in a discourse about future funding of the NHS. To do that requires a measure of cross-party consensus on some form of authoritative independent inquiry that could produce analysis and a range of options for a way forward. As the noble Lord, Lord Fowler, said, the start of a new Parliament is the right time to start this process for both Government and Opposition. Let us try to avoid weaponising the NHS—to use a phrase—and show a bit of political maturity from both Government and Opposition.

12.51 pm

Lord Kakkar (CB): My Lords, I, too, join in congratulating my noble friend Lord Patel on introducing this vitally important debate in such a thoughtful way. I declare my own interests as professor of surgery at University College London and chairman of University College London Partners’ academic health science system.

The question of sustainability regarding the NHS is not merely one of how we preserve existing services in a prolonged period of further austerity, but rather how we develop a new framework that can deal with the changing environment in which healthcare will have to be delivered, with expanding need that will exist for decades to come. We have already heard in this insightful debate that the 1.9 million of our fellow citizens currently living with more than one long-term condition will increase by 2018 to some 2.9 million. The number of people living with arthritis will double by 2030, and the number of those living with diabetes, and of those living with dementia, will double by 2050. Success in healthcare through the application of technology, advancements and the application of knowledge derived from medical research have resulted in greater cancer survivorship, for example, but those who survive malignant disease are more likely to see a specialist in any given year and to avail themselves of general practice services. Wherever we look, we will see increased demand.

Much thought has been given to the need for change and innovation among providers of healthcare services, and a consensus now indeed exists. There was recognition only recently of the need for greater flexibility to be given to healthcare providers to ensure that they can start to address these challenges. The review published by Sir David Dalton last year began to address this issue. It rightly identifies the need to ensure that clinical services are consistently delivered across the country, but in focusing on variation it potentially consolidates a cultural problem that makes it difficult for providers to show the courage to experiment and introduce into clinical practice new models of care, some of which may succeed and some of which may fail, but with those that succeed adopted more broadly across the system to improve clinical outcomes and drive efficiency.

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In the past, part of the proposed solution to improve the performance of providers was to introduce new legislation. The hope was that such legislation would improve the opportunity for providers to show greater flexibility and to be more innovative. Examples include the introduction of foundation trusts in 2004, and the ability for a multiplicity of providers to offer services afforded by the Health and Social Care Act 2012. Do Her Majesty’s Government believe that the current legislation, which offers significant opportunities for providers to show flexibility and innovate, is being fully exploited by healthcare providers in both the public and private sectors? Do they believe that further legislation is the answer to improving the ability of providers to innovate? What evidence is there that, two years after their creation, academic health science networks, which were designed to enable the introduction of innovation at pace and scale across health economies, are delivering the advances, improvements in care and efficiency improvements that were anticipated? In this regard, I remind noble Lords that I chair an academic health science network associated with University College London.

Beyond legislation and driving a culture change regarding innovation, there has been increasing emphasis on trying to determine how our NHS sits in comparison with other healthcare systems. There appears to be some disparity in the conclusions reached. For instance, last year the Commonwealth Fund published its regular analysis of 10 healthcare systems and concluded that the NHS remains the number one healthcare system in terms of safe, effective, patient-centred care. As we have heard already in this debate, the Quality Watch report by the Nuffield Trust and the Health Foundation, which was published last week, concludes that among 14 OECD countries with similar increases in demand in their healthcare system, the NHS does not perform as well, with relatively high mortality rates at 30 days for stroke and myocardial infarction and relatively poor survival rates at five years for malignant disease. What role do Her Majesty’s Government believe that international comparisons play, and what methodology is the most effective for us to refer to in trying to analyse where our healthcare system sits in comparison with others?

What analysis have Her Majesty’s Government made of other healthcare systems that are committed to equity of access and universal coverage—such as those in Germany and the Netherlands—but which use different models of funding that care, and what can we learn from those models? Have they addressed similar challenges in a more effective fashion? Have those models and systems of care been more effective at dealing with prevention as well with the management of patients with chronic conditions, at providing autonomy for healthcare providers, and at ensuring that innovation can be applied and adopted in the most effective and rapid fashion?

Finally, how do Her Majesty’s Government propose to go about building the long-term consensus that all noble Lords who have contributed to this debate believe is vital if the longer-term sustainability of our healthcare system is to be secured? Do Her Majesty’s Government believe that there is need for an independent commission

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to establish cross-party consensus on this matter and to inform public debate, which is vital if we are to carry our fellow citizens with us as we address what will be one of the most challenging and important questions facing those responsible for public policy in the coming years?

12.58 pm

Lord Mawhinney (Con): My Lords, I, too, congratulate the noble Lord, Lord Patel. I very much appreciated his kind personal comment at the beginning of his speech.

This debate is about the sustainability of the NHS, not its desirability. If you talk about its sustainability, hard words about the NHS are likely to follow. Those who issue hard words might conceivably be charged as not being as supportive of the NHS as they ought to be, so I want to make two personal statements before I start. First, for the majority of this year I have been in the intimate care of the NHS. I owe my life to Steven Tsui and to the doctors, nurses and technical staff who have looked after me so well over the past few months. Anyone who has been through what I have has to be an NHS fan. Secondly, for the record, apart from the years when I lived and worked in the United States, I have never had any private health insurance; I have been an NHS man all my life.

I start by setting a context. When the NHS started, in its first year it employed 144,000 employees. On 30 September 2014 the UK employment total was 1.6 million. The first NHS budget was £437 million, which in today’s money is about £9 billion. This year, as the noble Lord, Lord Patel, reminded us, we are going to spend around £116 billion. In the first year we spent 3.5% of our GDP on it; as we have been reminded, this year we are going to spend around 9%. That trajectory is not sustainable.

I turn to money. The recent King’s Fund report said that,

“financial problems are now endemic among NHS providers, with even the most prestigious and well-run hospitals forecasting deficits”,

this year. Are we relaxed about that? More than 25% of trusts are in deficit, some in deep deficit, and most of the rest of them are heading in that direction. In the seven years between 2006-07 and 2012-13, over and above the normal financial arrangements, the department slipped about £1.8 billion worth of cash to hospitals in addition, just to keep them going. There is one hospital in this country that in the last few years was in receipt of £1 million per week over and above its normal financial arrangements, just to keep going. I am told that one of the London teaching hospitals is £200 million in debt. Monitor predicts that by 2021 the NHS will be £30 billion in debt—and if there is one thing you can say about that figure, it is that it will be an underestimate when we get to 2021.

I turn from money to service. I had the honour of being a member of the Select Committee on Public Services and Demographic Change. We said in 2013 that,

“the current healthcare system is not delivering good enough healthcare for older people”.

I noticed the president of the Royal College of Emergency Medicine saying recently that the treatment of patients at A&Es is “inhumane”. I noticed the Alzheimer’s

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Society saying that GPs are reluctant to diagnose patients with dementia because they feel there is nothing that the NHS can do. And it is a disgrace that if you go into hospital at weekends, you are 15% more likely to die than if you go in during the week.

We have had a lot of nice things said about the NHS Five Year Forward View. I shall read one sentence from it:

“The traditional divide between primary care, community services, and hospitals”,

increases the barrier to the type of care that people need. None of that even hints at sustainability.

The NHS is not only a sort of religion, it is a political football. If I were a Labour Member, I would be really pleased that we had started it. As a Conservative, I am really pleased that we have looked after it for more years than anyone else. Both sides have played their part in keeping this political football moving backwards and forwards, but it is time to blow the whistle—it is time to stop. I want to be the third ex-Health Minister, and there may be more yet to speak, who says that it is time for an independent review. It is time for an independent national commission to recommend how we should move from unsustainability to sustainability. Will the Minister’s department undertake to put pressure on the rest of the Government to set up a royal commission, or would it prefer that an independent commission was set up, independently generated?

1.06 pm

Lord Crisp (CB): My Lords, like others, I agree that the noble Lord, Lord Patel, is right about the need for a fresh look, going beyond politics and all the experts. We need to reframe the arguments and get others into the debate, and to take a long-term view.

I agree with the many people who have spoken, starting with the noble Lord, Lord Fowler, about the importance of understanding and reviewing how the NHS is financed. However, I want to take these arguments a bit further and think about sustainability in the round. Sustainability is not just a financial issue. I shall give two examples. Barely 50% of children have met all their development milestones by the time they start school. This influences children’s future physical and mental health and their ability to learn. The second example is that social isolation and loneliness in old age have the equivalent health impact of smoking 15 cigarettes a day. Moreover, loneliness very much slows the rate of recovery. Your Lordships can see where I am going with this argument. I have deliberately chosen two issues that are not directly about healthcare yet the NHS has to pick up the pieces; in most cases it cannot have a direct impact on these issues, although others can.

Sustainability is wider than that, too. If the NHS and social care are the formal healthcare system—and we have heard the figures for what that costs—the latest figures from carers’ associations is that if we were to monetise what carers provide, we would see that they provide about £120 billion worth of care. If you add into that what civil society, volunteers and all the NGOs and so on do, you see that there is a vast informal care system. My point in raising that is that

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what happens in the informal care system impacts on the formal care system, and vice versa. If the informal care system gets weaker, it puts more pressure on the NHS, and if the informal care system gets stronger, it takes some pressure off it. These are important points about sustainability, and any future commission needs to be thinking about these as well as how to finance the NHS.

A lot has been said about prevention, but we also need to think about this in a different way as being a positive term, sometimes called “health promotion”. It is about the creation of a resilient, healthy population and society. The Minister knows that I have a debate—later in the autumn, I hope—on what I call “health creation”, which is precisely what we are talking about here. There are two simple points here, and I will not go any further: we need to think about sustainability in the round, and the NHS itself cannot make itself sustainable—others have to play a major role in that.

My second point is that looking at financing is right, and clearly we need to chase improved efficiency at every level. However, we should not hope for too much from a review of a new financial model. I will give just two examples from around the world—again, I do not have time for more. Holland changed its system with great fanfare about five years ago so that it consisted of private insurers which then purchased from anybody. The net result of that, which was probably predictable, was that unit costs have gone down and volumes have gone up, and Holland, which now spends 25% more than we do, is spending more than it did. That was an experiment in changing the financial arrangements.

I will not talk about co-payments—that is, getting people to pay as well—other than to say that all the studies show that if they are to be big enough, they will affect both the poor and the rich: they affect the behaviour of the rich, who then go elsewhere, while the poor cannot afford to pay for services. You can have small co-payments, but large ones have those impacts. My point is that we must look at how the NHS is financed—I understand and agree with that point—but we should not hope for too much from what others around the world have done.

My third and final point is that in the short term you cannot take politics out of the NHS. To go back to Holland, the Dutch Government do not directly run hospitals, but the Dutch Health Minister gets all the questions about hospitals in his Parliament anyway. However, we can have a cross-party consensus about the longer term.

I will quote from a Portuguese report—if noble Lords allow me, I will say it in English; indeed, your Lordships may prefer me to do so. Portugal is trying to transition from today’s hospital-centred and illness-based service system where things are done to or for a patient to a person-centred and health-based one where citizens are partners in health promotion and healthcare. It will use the latest knowledge and technology and will offer access to advice and high-quality services in homes and communities as well as clinics and specialist centres. It will provide a better service with lower infrastructure costs. That is Portugal’s aim over 25 years. It will not be difficult for us to construct that sort of

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consensus and vision about where we are trying to go, but we need to understand that that is a radical change. If we are to have a radical change and we are pointing in that direction, we need a clearer longer-term plan than the five-year plan we have, and we need the sort of transition fund that some people are arguing about.

My final point is that I absolutely agree with the proposal of the noble Lord, Lord Patel, that there should be an independent reframing of the arguments, which will bring other people into the argument so that the same people are not having the same arguments, which has often been the case in the past. To do that, the starting point is to create that shared vision of where we are going, so at least we have something to steer towards, and we need to understand that sustainability is about these wider social impacts, not just about the efficient management of money within the NHS, important as that is.

1.12 pm

Lord Cormack (Con): My Lords, it is a great pleasure to take part in this debate, which was so splendidly introduced by my friend, the noble Lord, Lord Patel. We have had many conversations about this in the early morning in the Truro Room, so I was very confident that he would make a splendid speech, which he did. This is a refreshing debate because it has been marked by consensus. I single out the speeches of the noble Lord, Lord Warner, and my noble friend Lord Mawhinney, both of whom, in slightly different words, made the case for saying, “The time for using this as a political football is over”. We need to work from both sides of the House. No substantial difference of opinion has been expressed so far during this debate, and I hope that I will not depart from that.

When I first entered another place 45 years ago I was a very humble PPS in the Department of Health and Social Security, where a very few Ministers—one in this House, three in the other place—looked after the whole of health and social security. When I reflect on that, I reflect on how far we have moved away from that tight-knit and rather efficiently run pattern. Of course, we now have a much larger population and a much larger surviving population. When I entered the other place I did not have a single constituent with artificial knees or hips, or with a transplant. I even wrote to those who attained the age of 80, which would not be possible now. We have moved on.

As the noble Baroness, Lady Emerton, reminded us, it is well over 70 years since Beveridge, and 67 years since the NHS came into being. The sort of commission or inquiry which has been called for today is therefore desperately overdue. It is not the first time that a commission has been called for in your Lordships’ House. I made the call in earlier debates introduced by the noble Lord, Lord Turnberg, in which the noble Lord, Lord Patel, participated. We need an inquiry or a commission, and I would favour the latter. It must be an open-ended inquiry, with an open agenda. Nothing must be off-limits. My noble friend Lord Fowler made that plain in his speech. All forms of funding must be looked at. We have to have a plurality of funding if we are to have a sustainable NHS. Whether the extra

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funding comes from compulsory insurances or certain charges matters not, but it has to come—we have to have a quality service that does not lurch from crisis to crisis, from one application of sticking plaster to the next. It is crucial that we attain that.

I have a great deal of confidence because my noble friend Lord Prior, who will answer this debate, was himself very recently a notable and innovative chairman of the Care Quality Commission. I hope that he will bring the experience he acquired in that important role to his role as a Minister in the department. He succeeds a greatly loved Minister in our noble friend Lord Howe. Let us now, freed from the constraints of coalition government, have the sort of boldness that the Chancellor expressed in the Budget speech yesterday. Let us have a commission or an inquiry that will look at every aspect of the NHS and of care, and which will in particular look at funding.

All of us here believe in the NHS. There is not a politician of sense or sensitivity in any party who does not believe that. However, we must not be constrained by outmoded philosophies. We must look at the NHS and at the society it serves, and see what we can do to give it the quality service that will take us through this century and into the next. Today we heard the statistics; we know how many people will develop difficult conditions that need very sensitive treatment, sometimes for years. Many of the problems we talk about today were not problems when I was elected to the other place, because not only did some of the drugs and techniques not exist, but people then would have died long before they needed the attention we are now calling for.

I hope that we will have a positive response from my noble friend on the Government Front Bench and that at the very least he will tell us that he will have serious conversations with the Secretary of State on this. However, if it comes to naught, which I hope it does not, we in your Lordships’ House should establish one of our special committees to look at these issues. I know, looking across and around the Chamber, that we have enough expertise; many of the people who could contribute to such a committee have spoken today. This problem will not go away. It must be addressed, and we must make sure that it is. A commission and inquiry is an idea whose time has come, and we must ensure that it happens.

1.19 pm

Lord Desai (Lab): My Lords, it is a pleasure and a privilege to follow the noble Lord, who has such vast experience in both Houses.

I thank my noble friend Lord Patel for introducing this debate. I think that I have spoken in every health debate that he has initiated. He is quite right to say that there ought to be a royal commission, but I expect that the Government will pour cold water on that. Any royal commission appointed any time soon would report around the time of the next election, and no Government want a royal commission report on their hands when they are trying to fight an election. Perhaps, as the noble Lord, Lord Cormack, said, we will continue this debate—and perhaps all the debates in your Lordships’ House on the National Health Service, collected together in one volume, might by themselves tell us a lot about how to cure the NHS.

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As a lot of people have said, there is a consensus that we all love the National Health Service. A number of individual experiences, including those of the noble Lord, Lord Mawhinney, tell us that it is extremely helpful and valuable to our lives. At the same time, in all the years that I have been in this country—more than 50—there has never been a time when people have not said that the NHS is in crisis. We can sustain the National Health Service only by believing that it is perpetually in crisis and that something has to be done about it.

We tend to look at the NHS from the supply side, which involves asking how we can get more money and increase productivity, and how can we reorganise it. Every party reorganises the health service when in power and, when in opposition, criticises any reorganisation carried out by the Government. We have sustained a good National Health Service but, in my view—I have said this before in your Lordships’ House—so far we have not done anything on the demand side. Because we promise to deliver healthcare for free to whomever demands it, we have taken it for granted that all the adjustments have to be on the supply side, not the demand side.

I believe that there are a number of things that we ought to be able to do, as some noble Lords have mentioned, to, as it is called, “nudge” the behaviour of the public who demand healthcare. If there is ever a health commission, it ought to examine how to bring about behavioural change, perhaps by providing incentives to people to change their behaviour. Yesterday, the Chancellor revived the idea of using vehicle excise duty for road building. I had always thought that the Treasury did not like hypothecated taxes but here we have a hypothecated tax. There is no reason why the Chancellor should not tax sugar and salt and link the tax quite explicitly to the health service—even though it would finance only a very small proportion of the costs. We are worried about obesity and diabetes but we do nothing about salt and sugar in food. However, there is absolutely no reason why we cannot do this. We ought to urge the Government to explore things that will influence behaviour.

Another suggestion that I have made before in your Lordships’ House is that, although we do not want anyone to feel that they are being charged for using the health service, we ought to make clear to people the cost of providing it. People think that because it is free, it is costless—but it is not. We often worry about people missing GP appointments, so I propose a sort of health Oyster card for every citizen. Every time they used the National Health Service, they would have to swipe their Oyster card and a certain number of points would be deducted. The Oyster cards could be recharged. At the end of the year, people would get a bill showing how many points had been used and on which health service facilities. If people missed a GP appointment, 15 points would be deducted rather than two—things like that. Perhaps something like that could be done to make it clear to people that a free National Health Service is not a costless one. If we can somehow get people involved as patients and potential patients so that they modify their behaviour in demanding healthcare, it may solve some of the problems of the National Health Service.

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1.24 pm

Lord Ramsbotham (CB): My Lords, I, too, congratulate my noble friend Lord Patel on obtaining this debate, yet again confirming his wisdom, his expertise and his commitment to an issue about which I know he cares deeply. As a mere NHS user, I hardly dare add my voice to those of the many experts who are contributing, my only qualification being that, for two years, I chaired the Hillingdon Hospitals NHS Foundation Trust, having my noble friend Lady Flather as one of my non-executive directors.

Before making two points about the sustainability of the NHS, perhaps I may share the first of two wishes. I once worked for a general who banned the use of the words “significant”, “vital” and “basic” because they were merely pejorative and signified nothing. A distinguished psychiatrist said the same, in clinical terms, about the Home Office’s use of the words “dangerous” and “severe” to qualify a personality disorder. If I could ban one word from politics it would be “change”—pejorative for doing the opposite of what the other side did, under the delusion that it is a hallmark of political virility. In fact, change for change’s sake often leads to little more than unnecessary and expensive disruption, particularly when its consequence has not been fully assessed. In the public sector, evolution is invariably a better, or more appropriate, route to improvement than revolution. The debacle following the coalition Government charging ahead with change in their pre-planned Health and Social Care Bill, before examining the books and seeing what was possible or necessary, is a classic example of what I mean. Above all, it flew in the face of the priority plea of practitioners, which is for stability.

Sustainability depends on maintaining and not squandering resources. Quite clearly, the biggest problem facing the NHS is the rising cost of meeting the physical and mental health needs of an ageing population. My first point is that affordability requires the ruthless elimination of anything unnecessary or wasteful, such as silo working when more than one ministry is involved. There are two examples from the criminal justice system. First, I hoped that prisons and probation would be represented on local health and well-being boards, resulting in improved support for offenders. Not only are they not represented on all, but fewer than 20% of clinical commissioning groups realise that they are responsible for meeting the physical and mental health needs of those undergoing supervision in the community. Secondly, expensive lack of co-operation between ministries is exemplified by the Ministry of Justice’s proposal for what it calls a “secure college”, detaining 320 children aged between 12 and 17, the vast majority of whom have mental health or emotional well-being problems, on one site in the middle of Leicestershire, while at the same time NHS England’s Children’s Mental Health and Emotional Well-Being Task Force is piloting a scheme to ensure that such children are kept in their home areas to ensure consistency of treatment. The Chancellor must be fuming.

My second point concerns senseless waste of equipment and drugs. Almost four years ago my wife had four vertebrae fractured in a car accident and had to wear a plastic body brace for some weeks. When she asked the issuing NHS hospital what she should do with it

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when it was no longer needed, she was told that, because they did not re-use such things in case infection was passed on, she should throw it away. In the event, she was assessed by a consultant in a private hospital, who, on hearing this, asked whether he could have it because it was worth a lot of money and could be used many more times. Only last week I tried to decline a once-prescribed box of pills which I did not need, only to be told by the pharmacist that there was no point in handing it back because, once issued, it had to be destroyed. Individually these may be small items but, aggregated across the country, they add up to a considerable sum which the NHS surely ought to be able to find ways of saving. I hope that the current work of the NHS Confederation, working with other national bodies to explore how to make savings, will demonstrate to the Government the value of an NHS-led approach to this.

One of the qualities that I most admired in the marvellous people who worked at Hillingdon was applied common sense. Sadly, common sense is often a victim of adversarial party politics. That is why my second wish, in the interests of stability and sustainability, is that in addition to the independent commission called for by my noble friend and many others, the future of the NHS should be subject to cross-party consensus.

1.30 pm

Viscount Bridgeman (Con): My Lords, I, too, associate with other noble Lords in thanking the noble Lord, Lord Patel, for this very timely debate.

I have, on many occasions, talked to visitors from overseas who have used the NHS and who have told me how impressed and indeed amazed they were by the fact that the treatment had not cost them a penny. Free at the point of delivery is the bedrock principle of the NHS and admired throughout the world, and I will have more to say about that. This sits alongside the unpalatable fact that it is generally agreed that, by 2020, there will be a £30 billion deficit, in addition to all the deficits running at that time.

I strongly favour a royal commission. Arguably, its most important effect would be to take the NHS out of politics to enable the whistle to be blown, as my noble friend Lord Mawhinney has said—though whether it can remain in that condition is a future challenge for abilities greater than mine. I suggest that its brief should address, among other things, the question of free at the point of delivery. This is not only an admirable ideal in itself but, over the past three or four generations, has come to be regarded as a fundamental birthright. In political terms, frankly, no party would dare to question it. However, with a royal commission, politically unfettered and drawing on many government departments other than health, there appears to me to be a once in a lifetime opportunity to address this issue. I suggest to your Lordships that such a commission would have the unbiased authority that would enable it to address the unthinkable of some form of selective contribution by patients for treatment—the noble Lord, Lord Crisp, has obliquely referred to this—moving towards the ultimate goal of a financially viable National Health Service.

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The other point that I hope the royal commission would address has fortunately been answered already by the noble Lord, Lord Kakkar, who made the point of the need to address the national healthcare services in other OECD countries, and the noble Lord, Lord Crisp, has given some examples.

In 2002-03, general practices were offered a new contract—personal medical services—which offered better funding if they undertook more services. Those that took up the new contract tended to be the more entrepreneurial practices. In central London, to take one example, take-up was around 50%. The national policy has been to reduce PMS funding to that of GMS, the pre-existing contracts. I quote a doctor friend, who is one of the people concerned:

“They say that they will return any saving from PMS reviews to the local health area. There is no guarantee that that would substantially make up for lost funding. In one area I know of practices that stand to lose over £400,000 pa, which will cripple them”.

His own practice stands to lose over £300,000—we are talking about west London. He continues:

“At a time when primary care is being promoted as a means of achieving substantial savings, by enhanced and new ways of working, it seems counterproductive to make swingeing cuts in often the most innovative and high quality practices”.

I suggest to your Lordships that this is a very short-sighted measure.

1.34 pm

Lord Reid of Cardowan (Lab): My Lords, I am speaking in the gap because I was not sure that I would be able to stay for the whole debate. I want to make a very short contribution. First, I thank the noble Lord, Lord Patel, who is, if I may say so, the right person, at the right time. He is the right person, because nobody can in any way doubt his commitment to the National Health Service, and it is the right time, because it is outside what has been probably the longest general election campaign, courtesy of the five-year Parliament. That refers to the point people have made about the National Health Service being used as a political football. I do not think that it will ever be taken out of politics, because politics is a series of moral choices about the commitment of scarce resources to infinite demands. But it can be taken out of party politics, and I think that today’s conversation begins to do that.

Let me make my position very plain. First, like everyone else here, it goes without saying that I am committed to the National Health Service, not just ideologically but, like the noble Lord, Lord Mawhinney, for very practical reasons—it saved my life over 50 years ago. Secondly, I am sure that there are efficiencies that can be carried out in the National Health Service. Some have already been mentioned, but I merely mention the fact that, in procurement, even in non-medical areas, there are more than 40,000 people purchasing for the National Health Service and most of them do not know the price being paid for a particular commodity by the person sitting next to them—the other 40,000. In an age where we can “compare the market” for everything and of one-click purchases through Amazon, it seems to me incredible that that is the position in the National Health Service.

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Thirdly, I am not one of those who is opposed to the use of outsourced private services. I think that a diversity of suppliers, where appropriate, is a good thing—again, that is not just ideological, but because it was central to reducing the huge waiting lists, which were mentioned earlier, and waiting times. The provision of that range of services, appropriately used, can be efficacious in removing the pain of people who had to wait in pain for so long. However, I do not believe that the solution lies in an insurance-based system. Witness the fact that 10 years ago, when I was Secretary of State, we were spending 6% or 7% of GDP, going up now to 9%. In the United States, at that time, they were spending 17% or 18% of GDP on the combination of a private-based and supplemented system—it will be even more now with Obamacare—and over 20% of that went on bureaucracy. We have to get the balance right.

Having said all that, the real issue is that the betrayal of the National Health Service does not lie in addressing the fundamental challenges; it lies in ignoring them and hoping that somehow this will go on sustainably and indefinitely, with a hugely increased demand. We all know why that is happening. There is an increased population, people are living longer, diseases and illnesses will become more chronic, and new treatments and technologies will be invented every day, all at a cost and rate that is above inflation. As I say, I believe that if we are committed to the National Health Service, our duty is to address this question in the long run, not to avoid it. That is why the noble Lord, Lord Patel, has opened a conversation today that does us and the National Health Service a service.

1.38 pm

Baroness Walmsley (LD): My Lords, this has been an excellent debate, so ably introduced by the noble Lord, Lord Patel. It is quite clear that the NHS is a national treasure and something that is dear to the hearts of all noble Lords. The principle that it is free at the point of need is something that all political parties continue rightly to support.

Every one of us has cause to be grateful to the men and women from all nations who work in the NHS. We rely on their skills and knowledge, and those from abroad contribute enormously to it. That is why I start by asking the Minister whether he will work to persuade the Home Secretary that her determination to send home some foreign nurses who earn less than £35,000 per year is unjust and detrimental to the NHS and the people of this country.

The prediction is that costs in the NHS will rise at 4% per year, and more and more health trusts are going into deficit, as we have heard. Yet voters are reluctant to pay for this from either raised taxes or cuts in other public services—hence today’s demand for a royal commission, which I support. The Government’s Five Year Forward View needs to act as a catalyst to create new models of delivering care that are better suited to modern health needs and promote more efficient use of NHS resources, contributing to a more sustainable health and social care system.

I think of the NHS as an inflatable bucket with a hole in the bottom. It is impossible ever to fill up such

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a device with enough money. It is inflatable because the demands on it are constantly growing as we live longer and the birth rate increases. Life expectancy is going up. The number of those aged 65 to 84 will increase by more than a third in the next 20 years, and the number of those aged over 85 will double—I hope to be one of them. In addition, with ever more wonderful developments in treatment, there are more demands for them to be available for patients, but they are usually very expensive.

The hole in the bottom of the bucket is the fact that as we learn to treat, and even eliminate, certain diseases, other preventable diseases are increasing in prevalence because of our lifestyles. Even though the Chancellor promised more money for the NHS in his Budget yesterday, there will still not be enough unless we stop up the hole in the bucket. So I think there are three watchwords: integration, innovation and prevention—the demand side referred to by the noble Lord, Lord Desai.

On prevention, we need to get people to take more responsibility for their own health—the noble Lords, Lord Patel and Lord Crisp, called for that—and support them in doing so. We need to ensure that young people and their parents understand what a healthy lifestyle looks like and are given the means to live it, with exercise facilities, access to fresh, nutritious food, and warm, dry homes. We need to eliminate child poverty, since poverty is the major factor leading to the health inequality which decreases lifetime opportunity. We need health education to be carried out well in all schools, and public information and treatment programmes so that those adults who missed out on such education can still get the message.

Public information programmes work well—one only has to look at the public information programme on HIV set up by the noble Lord, Lord Fowler, all those years ago to understand how well. In Australia, you cannot move without seeing information about protecting your skin from the sun and skin cancer. We could do with one of those campaigns here. Such programmes are also cost effective because many preventable diseases cost a great deal of money. Smoking costs the NHS £5.2 billion every year, but smoking prevention programmes and anti-bullying programmes in schools can return as much as £15 in savings on physical and mental health for every £1 spent. Obesity costs the NHS £4.2 billion per year and lack of exercise costs it £1.1 billion per year, according to the King’s Fund. Yet despite the fact that every £1 spent on free use of leisure centres returns £23 in reduced NHS use, quality of life and other gains, many local authorities are having to close centres rather than give free access to them. Musculoskeletal problems such as back pain and arthritis are the most common conditions that limit people’s daily lives and the largest single cause of loss of working days. They affect 8.3 million adults in England. Some, but not all, of these problems are preventable by keeping to a healthy weight and taking moderate exercise. The costs to society of poor air quality, ill health and road accidents induced by road transport exceed £40 billion per year. It has been calculated that getting one more child to walk to school can save £768. All these things can be done fairly cheaply and prevent a lot of burden on the NHS.

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Most of these preventable diseases are focused on by local authorities in their public health programmes, so I ask the Minister whether any of the extra billions of pounds for health services announced by his colleague the Chancellor yesterday will go towards prevention in the form of the vital public health programmes run by local authorities and schools. A short-term approach which reduces prevention activities, such as we have recently seen, will have a longer-term impact on healthcare services in the future, putting additional and avoidable costs on the health and social care system. Cardiovascular disease is a good case in point, where obesity and lack of exercise cause a great many of the 33,000 premature deaths from that disease every year. Here we see another problem. According to the British Heart Foundation, there is wide variation in both access to and quality of care for patients across the UK. This is of particular concern given the range of evidence-based interventions, commissioning guidance and NICE guidance that exist but which are not universally adopted across the system, resulting in suboptimal care and avoidable use of NHS resources. Significant opportunities to identify and optimally to manage patients are too often missed. Think how much could be saved if the worst lived up to the standards of the best.

Prevention also includes vaccination and screening programmes. There is good news and bad news here. There are still parents who are reluctant to have their babies given the triple vaccine and the measles vaccine despite all the reassurances that have been given by experts, and we now find that whooping cough and measles are rising again. I was shocked to hear that the very good uptake of the human papilloma virus vaccination has recently fallen. This is a group of completely preventable diseases, so what are the Government doing to encourage all teenagers to have the vaccination?

I heard a bit of good news at a presentation in your Lordships’ House recently. I was told about plans for a bowel scope screening programme for all 55 to 64 year-olds. The pilot schemes have shown that this reduced people’s chances of developing bowel cancer by a third and reduced the death rate from this disease by 43% because of early diagnosis. This has the potential to save the NHS £300 million each year plus great human misery. Can the Minister say when this programme will be rolled out across the country and whether it will become available also for those over 64? The breast screening programme has also saved many lives, including mine, but it ends at age 70. Given that we are all living longer, are there any plans to raise the cut-off age for routine screening?

Prevention also requires patients to be vigilant about their own health and to go to their GP promptly if they are worried about symptoms. It then requires GPs to recognise the signs and refer people to specialists as soon as possible. Some GPs are reluctant to do this until they have commissioned more tests, but this could cause serious delay to those with disease, on the one hand, and waste a lot of needless tests, on the other, where a specialist might have recognised right away which patients needed tests and which did not. I

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refer particularly to skin cancers, where it can be difficult for the non-specialist to distinguish the benign from the dangerous.

Early diagnosis is, of course, both a life saver and a money saver. However, it is worrying to note that the uptake of NHS health checks is currently at a disappointing 48%, well below Public Health England’s target of 66%. Some diseases are estimated to be grossly under-diagnosed. For example, four in 10 adults with hypertension, estimated at more 5 million people in England, are currently undiagnosed. This is a preventable killer disease which responds well to treatment and lifestyle changes, so we need to get on top of this under-diagnosis.

I am pleased that the Government plan more support for British scientific and medical research. Britain has the potential to lead the world in the discovery of new personal genomic treatments which match the patient’s DNA with new drugs. As an integrated healthcare system with tens of millions of patient records, the NHS is well placed to exploit the immense potential of genomics. But these treatments have many barriers to breach before they reach the patient, and we know that the United States has a much better track record when it comes to approvals of new drugs. So I would like to hear from the Minister about the progress of the accelerated access review which was initiated in response to this situation by his noble friend Lord Freeman but about which I have not heard much recently. Can the Minister tell the House what progress has been made on that?

1.49 pm

Lord Hunt of Kings Heath (Lab): My Lords, as we are touching on procurement, I declare an interest as president of GS1 and the Health Care Supply Association. I, too, warmly welcome the debate of the noble Lord, Lord Patel, and the excellent way that he put forward his arguments. Of course, the issue of sustainability has been asked almost every year since the NHS’s formation in 1948. Right from the start, voices said that public expectations were too high and called for explicit rationing of services. We know that almost as soon as the NHS was established, our friends in the Treasury were keen to see the introduction of charges. Indeed, in the early 1950s, charges for spectacles, dentures and then prescription charges were introduced. This was followed by the 1953 Gillebaud commission. At the time, it was thought that NHS costs were spiralling out of control and Gillebaud was asked how we could reassert control over NHS spending. In fact, he came to the conclusion that there was a popular misconception about a vast increase in costs and ended up recommending a big increase in capital expenditure.

Through the years, we have had many other reports. Harold Wilson in opposition did not think much of royal commissions. He famously said that they took minutes and wasted years. But he was very fond of them in government and set up a royal commission on the NHS. Interestingly, its brief included the possibility of a greater reliance on other means of funding the NHS. But it was not convinced of that, and said that the claimed advantages of insurance, finance or substantial increases in charges—or co-payments, as we now call them—would outweigh the disadvantages in terms of

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equity and administrative cost. Mrs Thatcher had another go. Patrick Jenkin set up an internal review to look at the sustainability of the NHS, with potential restrictions of coverage, but it never published the results and no change took place. Now again, we are debating the sustainability of the NHS and the suggestion that a royal commission should be established.

I do not doubt that the challenges put forward today are formidable, but I agree with my noble friend Lord Turnberg that the NHS is still sustainable. For all the problems that we face, the US Commonwealth Fund’s analysis of the NHS two years ago, on comparative terms, as the number one health system in the world at least gives us some confidence that we have something that is worth preserving—albeit one that needs developing as we try to deal with some of the issues that noble Lords have raised.

That does not underestimate the financial gap and the productivity challenge facing the noble Lord, Lord Prior, in his new responsibilities. We talked about the £30 billion gap by 2020. We have heard the forecast from NHS England that if we achieve a 2% to 3% per annum rise in productivity, we could reduce that to £8 billion. The Government have promised that £8 billion, but I doubt that it will be seen until the 2020-21 financial year, judging by the documents published alongside the Budget yesterday. We know that historically the NHS has achieved a 0.8% productivity gain, so that would make the gap £21 billion and not £8 billion. More recently, in the last Parliament, there was a 1.5% productivity gain, but that dipped in the last two years because of the post-Francis impact of increased staffing and, because there had been cuts in training commissions, agency costs spiralled out of control.

Then we had the report of the noble Lord, Lord Carter. My noble friend Lord Reid is quite right: clearly, in relation to procurement, there is money to be got. But even if we implemented the whole of the Carter report, which includes some brave decisions about the employment of staff midweek on wards, it would produce only £5 billion. Put all that together and clearly there is a big gap. Last year provided deficits of £822 million: this year they are projected to be £1 billion.

Alongside that, the Government are actually increasing demand rather than discouraging it. Understandably, more people want access—but 24/7 access? The NHS Choices website is always encouraging people to use the service more and more. It was right for my noble friend Lord Desai to ask the noble Lord about the tension between this desire to give greater accessibility and the issue of demand management. We are reaching a difficult point where the two are not deliverable.

I hope that the Minister will say how he thinks productivity will be improved, but another issue that is vitally important is the quality of management and leadership in the NHS. The challenge is daunting: the productivity gap, the move to seven-day working without the use of agency staff—let alone health and social care integration. At the same time, we know that at the moment performance is deteriorating. Clearly, we need the best possible managers and leaders. I am sure that the Minister has read the Health Service Journal report on leadership, chaired by Robert Naylor, which came

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out last month. It said that a third of trusts have either vacancies at board level for key leaders or were employing highly expensive interns. There is a 20% vacancy rate for financial directors and chief operating officers. One in six trusts has no substantive chief executive. One in 10 has retained the same CEO for more than a decade, but the median time in post for a trust CEO is a mere two and a half years. One in five CEOs has been in post for less than a year.

Nigel Edwards of the Nuffield Trust has said that high executive turnover,

“has a chilling effect on the willingness of chief executive officers to take bold initiatives and encourages a passive and responsive culture”.

In other words, the fact that chief executives are in fear of losing their jobs encourages the kind of culture that will make sure that we cannot deliver the productivity challenge. I agree with my noble friend Lord Warner that there is no chance whatever that the Government will get to 2020 with a 3% to 4% productivity gain with the current culture—a blame culture with incessant interference by the regulatory bodies and supervising bodies into the work of NHS trust chief executives

I know that the Minister has huge experience—apart from CQC, he chaired a highly successful trust in Norwich, Norfolk—and I know that he understands this. At heart, Ministers set the tone and culture. I appeal to him to start to change the culture. He will have to put much more trust in people in the field to achieve this change. Of course we have to intervene, as my noble friend Lord Warner said, when an organisation is clearly failing, but if we carry on the way we are doing at the moment we will simply not achieve what we need to achieve, and I believe that the health and social care system will fall over.

I know why noble Lords wish to see a royal commission established—on the face of it, it is very attractive. But I sound a note of warning. My experience of the NHS is that the moment you set up a committee of inquiry, it is always used as an excuse to put off difficult decisions. In a sense, we have in the Five Year Forward View a challenging and agreed programme—agreed by almost everybody—for the way forward. If a commission were established, it would have to be clear that its remit accepted the five-year forward plan as the way to go. I fear the killing effect of a royal commission that took two years and then a Government taking another two years to make up their mind about challenging funding issues such as co-charges. We have already had the Barker commission, set up by the King’s Fund, which went into most of the issues that noble Lords raised.

At the end of the day, I agree with my noble friend Lord Reid that the political process will always come to the fore. The sustainability of the NHS ultimately depends on political will. In the end, it is down to Governments to make sure that the NHS provides what the public want. Do the public want the NHS to be sustained? Yes, they do.

1.59 pm

The Parliamentary Under-Secretary of State, Department of Health (Lord Prior of Brampton) (Con): My Lords, I thank the noble Lord, Lord Patel, for introducing this

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fascinating debate, which has covered a very wide range of subjects. I hope noble Lords will forgive me if I do not address all their questions; I may not even be able to refer to all of them by name. That is not because I did not note what they were saying but because there is just not enough time to go into what they said in detail. I do have a speech here but I am putting that to one side because I do not think it does justice to the issues that were raised today. I have some notes here instead. I will come back at the end of my speech, if that is acceptable, to discuss whether or not there should be an inquiry and, if so, what kind of inquiry or investigation it should be.