Health and Social Care (Community Health and Standards) Bill

Public Bill Committee, 13 May 2003.

Standing Committee E

Health and Social Care (Community Health and Standards) Bill

John Hutton (Labour, Barrow and Furness)

I beg to move,

That—

(1) during proceedings on the Health and Social Care (Community Health and Standards) Bill the Standing Committee shall meet when the House is sitting on Tuesdays and Thursdays at 8.55 am and 2.30 pm, except that on Tuesday 3rd June it shall meet at 10.30 am and 4.30 pm;

(2) the proceedings to be taken at the sittings shall be as shown in the second column of the Table below and shall be taken in the order so shown;

(3) the proceedings which under paragraph (2) are to be taken on any sitting shall (so far as not previously concluded) be brought to a conclusion at the time specified in the third column of the Table;

(4) paragraph (2) shall not prevent proceedings being taken (in the order shown in the second column of the Table) at any earlier sitting that that provided for under paragraph (2) if previous proceedings have already been concluded.

TABLE

Win Griffiths (Labour, Bridgend)

Under the Standing Order, the debate may continue for up to 30 minutes.

Simon Burns (Conservative, West Chelmsford)

On behalf of my right hon. and hon. Friends, I echo the Minister's sentiments in welcoming you, Mr. Griffiths, and your colleague on the Chairman's panel, Mr. Atkinson, to the chairmanship of our proceedings. Given the confusion of the proposals, we look forward not only to proceeding in this Committee in a spirit of good faith and good manners, but to pressing the Government hard on their exact intentions.

The Opposition do not oppose the programme motion per se, but I wish to highlight two points. The first concerns the sitting on 19 June, during which we will debate clauses 157 onwards, which deal with NHS dentistry. I am glad to see the Under-Secretary of State for Health, the hon. Member for Tottenham (Mr. Lammy), in his place because I want to seek an assurance from him at the outset and give him plenty of time to prepare for that sitting.

Many of the Government's proposals will be finalised through regulations. To ensure that the Government have left enough time to discuss dentistry and the other matters in the programme motion, I am concerned that, if they are able, at the earliest possible moment during our proceedings and long before 19 June, they should give the Committee the draft regulations in any shape or form, so that we know more about their intentions as we conduct our debate. If that is not feasible, in order to help us in our deliberations, can the Under-Secretary provide us with greater details of what he anticipates might be in the regulations?

The second matter is slightly more sensitive. I do not seek to criticise the Committee of Selection, because that would be totally out of order, but I am concerned about the impact of the composition of this Committee on its ability to debate fully and properly and to tease out of the Government their arguments on those parts of the Bill that are highly contentious.

Will there be enough time under this programme motion to do that? As you know, Mr. Griffiths, composition of Committees should reflect the will of the House of Commons. When one sees the list of Labour Members who have been selected for this Committee—apart from Ministers and the sprinkling of Under-Secretaries, who do not get paid but are, so to speak, on the payroll—one is concerned about the time allocated.

Some 65 Labour Members—15 per cent. of the Labour party—voted for what is known as the rebels' amendment, yet there is no true person on this list who actually—[Interruption.] It is worrying that the timetable may not allow enough time for a possible rebel to decide what action to take. The hon. Member for Ealing, North (Mr. Pound) had it both ways; he voted for the rebel amendment yet supported the Bill on Second Reading, to enable him to develop his arguments.

Win Griffiths (Labour, Bridgend)

Order. I am confident that the hon. Member for Ealing, North will be well able to put whatever argument he may wish to put in the Committee, so we do not need to discuss that subject any further.

Simon Burns (Conservative, West Chelmsford)

I am grateful to you, Mr. Griffiths. I fully appreciate and accept what you say. However, may I, as a final word on the matter, through you, give the hon. Gentleman some advice? He should table his amendments to tease out his concerns about the Bill as soon as possible, so that they can be selected in time to be debated. That will ensure that he has his fair share of time under the programme motion, so that he can develop his arguments on why he is opposed to the Bill and yet supported it on Second Reading. I am sure that the hon. Gentleman will heed my advice. Having said that, we have no objections in principle to the programme motion.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

I, too, welcome you, Mr. Griffiths, to the Chair today, and also Mr. Atkinson, whom we will be seeing at other sittings. I hope that I speak for the Opposition Benches when I say that we hope to cause both of you as little trouble as possible. However, we cannot promise that we will cause no trouble whatever.

The Bill is exceedingly long. It has six parts, 181 clauses and 12 schedules, and it is an extremely complex piece of legislation, as has been evidenced by the tortuous route that it has taken to reach Committee.

The official Opposition are content with the programme motion at this stage, but that might not always be the case. Already, 186 amendments have been tabled without the benefit of any amendments on behalf of the 65 Labour rebels. It is sad that they may not have a voice, but I anticipate that there may be an opportunity for Members, such as the hon. Member for Ealing, North, to table some amendments. I want to ensure that we have time to discuss those amendments, as my hon. Friend the Member for West Chelmsford (Mr. Burns) so ably said in his opening remarks on this programme motion.

Discussions have taken place through the usual channels, and I am gratified to know that the

Government are willing, at any stage during the Bill, as I understand it, to revisit the programme motion and consider the number of sittings that we have allocated for discussing the various parts of the Bill. We are pleased that 10 of the 20 sittings so far programmed are devoted to the important section on foundation hospitals, an issue on which there is so much dissent in the Labour party. However, I am also grateful to the Government that we are able to reserve the position and consider further sittings, even though that may involve Mr. Griffiths and Mr. Atkinson sitting for longer than they might have anticipated. I felt at this stage that it was fair to put that on the record, because we were so pleased that we had had such a generous offer from the Government, particularly as I feel sure that there will be more amendments representing the views of the 65 Labour rebels who voted for the amendment on Second Reading.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I, too, take the opportunity to welcome you, Mr. Griffiths, to the Chair, and I also welcome the Ministers who will be speaking to much of the Bill.

Conservative Members and Liberal Democrats voted against the programme motion, bearing in mind the scale of the Bill and the length of time that we will spend in Committee, rather than specific divisions. Many people have waited a long time for the Bill and now find that, despite the many clauses, the Government insist that it leave Committee on 19 June. It is unusual for a Bill with so many clauses to be dealt with so peremptorily in terms of the planned sittings. I welcome the Government's willingness to reconsider the number of sittings overall, particularly if progress is slow.

The concern that I have already raised informally is that there should be adequate time to debate matters specific to the social care inspectorate. The hope and expectation is that there will be, but I fear that there will be so much to say about the Commission for Health Improvement that discussion may be truncated. I hope that it will be possible to revisit the question of a knife protecting discussion of that business if the need arises.

I share the concern that the allocation of only two sittings at the end of our consideration for a discussion of dentistry, when there will be little or no room for manoeuvre for extra sittings to discuss the reorganisation of dentistry and all that that entails, does not allow the matter due consideration. I have asked the Minister on the Floor of the House—I received no reply, but I have since asked for an undertaking on the record—whether, if the general practitioners agree to the Government's plans while we are in Committee, the Government will introduce in Committee clauses, which we know they have already drafted, to implement that agreement. I should be grateful if the Minister would confirm that, without prejudging the Government's view, if they have decided that that could happen by 19 June. We would certainly appreciate that.

My final point, which is really a point of order, is that the acoustics in this Room make it difficult to hear, particularly for those of us below the Gangway. We had no problem hearing the Member for West Chelmsford, but we did not hear some of the Minister's comments. Perhaps someone could examine the microphones.

Gary Streeter (Conservative, South West Devon)

As you may expect, Mr. Griffiths, I have a brief contribution to make. I endorse the comments welcoming you to the Chair, and I look forward to this Committee stage because nothing is more important to our constituents than high-quality health care. It is becoming a matter of common ground that hospitals should have a more local decision-making capacity, and the Bill's final form will be of huge significance to our constituents.

I have two points on the programme motion. First, following the personal statement yesterday from the right hon. Member for Birmingham, Ladywood (Clare Short), have you, Mr. Griffiths, had an application from her to join the Committee? She made it clear that she has profound reservations about the way in which the Government—[Interruption.]

Win Griffiths (Labour, Bridgend)

Order. That was a nice try, but we are not discussing the composition of the Committee, and that is not my job anyway. The hon. Member must go through the usual channels if he wants to make any changes.

Gary Streeter (Conservative, South West Devon)

Thank you, Mr. Griffiths.

My second point is better. I am not against programme motions per se, whether in Standing Committee or on the Floor of the House, but I am genuinely concerned that one of the lacunas in our scrutiny of legislation is that important Bills go through Committee but receive adequate and proper scrutiny only when they return to the Floor of the House on Report. One reason why there is a problem is that the Government often produce amendments at the last minute.

I want to back up the point made by my hon. Friend the Member for West Chelmsford and ask whether Committee members can have the regulations as soon as possible. May we also have Government amendments at the earliest possible stage so that we can consider them? We all know that amendments can transform a clause and a Bill, and we need adequate time to study them.

I do not know whether the Minister will respond to this brief debate, but it would be good to have an assurance that Ministers are aware that an abuse of House procedure often takes place during the Report stage of Bills such as this. May we also have an assurance that there will be adequate time to consider those last-minute amendments and issues with which we have not adequately dealt that may come from the House of Lords in due course?

I am happy with the time allocated for the initial stage of these Committee proceedings. However, we do not need surprises. We do not want tricks from the Government or massive amendments that can have a last-minute impact on the legislation. We must have proper time adequately to scrutinise what I suspect will

be one of the most important pieces of legislation in this entire Parliament. The legislation will set the scene for health care in this country for at least the next decade. It is a significant moment for us, and we want the Government to play ball and give us a fair opportunity to scrutinise the legislation.

John Hutton (Labour, Barrow and Furness)

The hon. Member for West Chelmsford tantalisingly mentioned 19 June, and we all look forward to reaching that date. He made that comment in the context of his concerns about the clauses on dentistry. As I said to him in the Programming Sub-Committee yesterday—I am happy to confirm it again today—we will try as hard as we can to ensure that the Committee has all the relevant information, as and when it considers various parts of the Bill. I cannot say that we will have the draft regulations ready at that point, but I can assure the Committee that we will see what further information we can provide on our thinking about how those clauses will operate.

Andrew Lansley (Conservative, South Cambridgeshire)

In that context, does the Minister accept that, as we begin to consider foundation trusts, it would be helpful to have information on the Government's conclusions about which trusts the Secretary of State will permit to apply to become foundation trusts? We might then begin to discern what criteria the Government are applying to that question.

John Hutton (Labour, Barrow and Furness)

An answer to that question is likely soon, and I am sure that the hon. Gentleman will look forward to that. We set out the broad criteria in the guide to applying to be an NHS foundation trust, so there will not be any news for the hon. Gentleman in that regard.

Chris Grayling (Conservative, Epsom and Ewell)

Before the Minister moves away from provision of further information, in the potentially unlikely event that the GPs approve the GP contract in the next few weeks, will he give the Committee an undertaking that, if the Government seek to introduce clauses implementing that contract, additional time will be provided to the Committee to consider them?

John Hutton (Labour, Barrow and Furness)

I shall deal with the GP clauses in a minute. The hon. Member for Oxford, West and Abingdon (Dr. Harris) also has a problem with that matter, and I must say to him that the number of sittings that the House has allocated for consideration of the Bill in Committee are broadly proportionate. He is concerned that we will have only 20 sittings, but I think that that is a proportionate number of sittings.

I wish to make the obvious point, which the hon. Member for Epsom and Ewell (Chris Grayling) also sought to make, that the number of Committee sittings are fixed. If he or anyone else proposes an adjustment at some later point to the programme motion, which I hope we will approve in a minute, he will have to find give up time allocated to other matters to allow us to consider other clauses more extensively. All right hon. and hon. Members must be aware of that reality.

Dame Cheryl Gillan (Conservative, Chesham and Amersham)

That is not the understanding that I had. I understood that if we wished to spend more time scrutinising the Bill, there was the offer of sitting

on Wednesdays or late into the evening. Will the Minister to confirm that that is the case.

John Hutton (Labour, Barrow and Furness)

That certainly is an option for the Committee. However, the Committee itself must address that. At the end of the day, the Bill must be out of the Committee on 19 June. It is for hon. Members to decide how they want to use their time within that available slot.

Gary Streeter (Conservative, South West Devon)

The Minister said that Committee stage must be completed by 19 June, but surely that is only if the Committee agrees the programme motion. If that is not the case, perhaps he will explain the current procedure.

John Hutton (Labour, Barrow and Furness)

The hon. Gentleman has uncharacteristically failed to grasp an important element of parliamentary procedure. The House decided that the Bill will be reported on 19 June, and the Committee, as I understand it, does not have the locus or competence to change a decision of the House. If the hon. Member for Chesham and Amersham (Mrs. Gillan) or other hon. Members want to sit on extra days, evenings or mornings, a Programming Sub-Committee can investigate that. However, that is not my preference, and I am probably not alone in that regard.

Last week, I apologised to the hon. Member for Oxford, West and Abingdon for not responding when he raised the issue of GP clauses in the House. When hon. Members can debate the GP clauses will depend very much on when the British Medical Association starts the ballot on the proposed new general medical services contract, and it will also depend on the result of that ballot. That may or may not be within the time scale of the Committee's consideration of the Bill. I do not know the answer to that question. However, if the ballot produces a yes vote—which I hope will be the case because it is a good contract for GPs and patients in primary care—and GPs decide to endorse the contract, if there is sufficient time the necessary amendments will be tabled during the Committee stage. That is probably the strongest assurance that I can give, but I realise that it may not be as strong as the hon. Gentleman would like.

The hon. Member for South-West Devon (Mr. Streeter) raised a fair point about the amendments being tabled in sufficient time for the Committee to consider them properly, and I assure him that that will be the case. If he reads the amendment paper, he will realise that we tabled amendments last week to part 1 of the Bill, and the Committee has two weeks to consider them. We started fairly, and we will continue fairly.

I know that there are concerns about the timing and allocation of sittings, but my strongly held view is that a fair attempt has been made to ensure that the Committee has sufficient time to consider the various clauses and amendments. I hope that the Committee will now endorse the sittings selection.

Question put and agreed to.

Win Griffiths (Labour, Bridgend)

I remind Members that there is a money resolution in connection with the Bill, copies of

which are available in the Room. I also remind hon. Members to give adequate notice of amendments, because, as a general rule, my co-Chairman and I do not intend to call starred amendments, including any starred amendments that may be reached during an afternoon sitting of the Committee.

Clause 1 - NHS foundation trusts

Simon Burns (Conservative, West Chelmsford)

I beg to move amendment No. 65, in

clause 1, page 1, line 5, leave out 'benefit corporation' and insert 'interest company'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following amendment:

No. 66, in

clause 1, page 1, line 8, leave out subsection (2) and insert—

'(2) A public interest company, in pursuance of an application under this Part, is constituted in accordance with prescribed regulations.'.

Simon Burns (Conservative, West Chelmsford)

These are probing amendments, as we simply wish to tease out from the Minister more information on the Government's thinking behind clause 1.

Paragraph 44 of the explanatory notes to the Bill explains quite straightforwardly that

''Clause 1 sets out that an NHS foundation trust is a public benefit corporation which is authorised under this Part to provide goods and services for the 'health service' in England.''

Paragraph 45 states:

''Under subsection (2), a public benefit corporation is defined as a body corporate.''

It will not escape the notice of Committee members that the language is businesslike and corporate. That may come as a surprise to some Government Members, who have always—rightly, I suspect—considered the national health service to be not so much a business as a national provider of services for the people of this country.

It is interesting to see how the Government's original intentions have changed. Ours is simply a probing amendment—I will not seek to press the matter to a Division—to reinstate, ironically, the status quo of Ministers' intentions. When the Secretary of State addressed the New Health Network early last year he outlined his vision of the future of the health service in several areas, and he spoke about his concerns on certain aspects where he felt the health service was failing at present. He went on to outline his views about foundation trusts and the way forward to free hospitals from political control at the centre and to devolve power to the people. I have no problem with those sentiments providing that the institutions remain within the NHS.

Unlike some of the Minister's hon. Friends, I take it at 100 per cent. face value that neither this clause nor the Bill are, in any shape or form, measures to seek either to begin, or aid, the process of privatising the health service. It is unadulterated claptrap to suggest that, and this clause reinforces that view. Equally, it is unadulterated claptrap to suggest that these provisions could be a springboard for the Conservative party to

begin that process when it returns to Government. That never has been, and will not be, its intention.

Steve McCabe (Labour, Birmingham, Hall Green)

As the hon. Gentleman is in such a generous mood at this early stage, will he tell us what method he will use to privatise the health service if he ever does get into power?

Simon Burns (Conservative, West Chelmsford)

As I am in such a generous mood, I will not treat that ridiculous intervention with the contempt that it rightly deserves. In many ways, the hon. Gentleman has a justified reputation as a Member of this House but, on occasions, he misses the plot and gets waylaid by introducing cheap, party political jibes that are without foundation.

Let me reassure the hon. Gentleman that, as I said on Second Reading, I believe, as does my party, that this country should have a national health service that is free at the point of delivery for all who are entitled to use it. That has been the policy of the Conservative party since it returned to office in 1951. It was definitely the policy of the Conservative party from 3 May 1979 until 1 May 1997, and it will remain our policy.

I must warn the hon. Gentleman that it does his intellectual reputation no good whatever to peddle ludicrous smears and inaccuracies that have no foundation. In a generous spirit, I hope I have reassured him, and I hope that between now and the 19 June we will not have to listen to any more ludicrous interventions like that made by the hon. Gentleman.

In his important speech to the New Health Network last year about his big idea, which is before us today, the Secretary of State said:

''The middle ground between state-run public and shareholder-led private structures is where there has been growing interest in recent years.''

He went on to say that people have been

''examining the case for new forms of organisation such as mutuals or public interest companies within rather than outside the public services and particularly the NHS''

That was picked up in the Department of Health publication of December 2002, ''A Guide to NHS Foundation Trusts''. In the foreword and elsewhere, the Secretary of State said:

''We will shortly be bringing forward legislation to establish NHS Foundation Trusts as independent public interest organisations modelled on co-operative societies and mutual organisations''.

All of that is straightforward and plain sailing. I understand—the Minister may be able to enlighten or correct me—that the phrase ''independent public organisations'' had been used as well as ''public interest companies''. That caused concern because of the association of the word ''company'' with private sector business. Now that the Bill is finally published, instead of any reference either to independent public interest organisations or to public interest companies, why do we see the phrase ''public benefit corporation'' in clause 1(1)? Subsection (2) goes on to say that

''A public benefit corporation is a body corporate which, in pursuance of an application under this Part, is constituted in accordance with Schedule 1.''

In its entirety, the clause is straightforward, but I should like the Minister to elaborate on how the original phrase became the ''public benefit corporation''. Is it literally and solely a change in language, or is there any subtle difference between a public interest company-cum-organisation and a public benefit corporation? Will the Minister explain the Government's thinking and the evolution from their original ideas—as put forward in their guide to foundation hospitals and in the Secretary of State's speeches—to what is in the Bill?

Andrew Lansley (Conservative, South Cambridgeshire)

I am privileged to have my first opportunity to participate in our Committee proceedings. I have not had the pleasure of serving under your chairmanship, Mr. Griffiths, although Mr. Atkinson is probably bored with the sound of my voice in this parliamentary year. I hope that his patience will not be strained in this first debate.

As my hon. Friend the Member for West Chelmsford made clear, the question of what kind of organisation we are discussing is important. Although we will examine how a ''public benefit corporation'' will subsequently be constituted and defined, the question of why there has been a move away from a ''public interest company'' as such is interesting. The use of public interest company status would bring with it all the tried and tested mechanisms of company organisation.

The hon. Member for Leigh (Andy Burnham) is present. In previous debates he has extolled the benefit of mutual status. He mentioned mutual organisations such as football clubs in which the supporters are the members; the Co-operative Society, which is well known to hon. Members opposite and even to Conservative Members, in a retail capacity; and the John Lewis Partnership. Such mutual organisations utilise company status and the normal arrangements of company law. That begs the question; why is it necessary to escape from the normal constraints and safeguards that have been established under company law in order to establish a different kind of corporate body?

Part of the answer to that question may have to do with the fact that the Bill deals with a body that does not bear direct comparison with those mutual organisations that have been prayed in aid by the Government as exemplars for NHS foundation trusts. The Bill deals with a body that is, at the same time, a mutual organisation for the consumers of a service and a mutual organisation for the producers of a service. That mixing of the two is unique.

The Government will wish to say that this is a unique organisation, but that uniqueness gives rise to many questions. Those who live in a locality that is close to a hospital, those who are patients and their families and those who work in hospitals will have differences of interest. Those differences cannot be waved away by the definition that ''public benefit'' somehow constitutes an overriding consideration to which everything else will be subordinated. That is not what happens. The purpose of making a constitution is not to deal with the happy circumstances in which

everybody agrees; its purpose is to deal with circumstances in which people do not agree and in which conflicting interests have to be reconciled. The establishment of a mutual organisation that consists of producers and consumers internalises the conflict. The constitution needs to be robust in order to deal with that. The constitution of companies is designed to be robust. Although it is not perfect and has its difficulties, it has been tested over time and is subject to constant amendment. The Trade and Industry Committee will shortly set out its ideas on the current review of company law.

In moving from the terminology of a public interest company, the Government have signalled their intention to establish a unique organisation. Before the Committee begins examining the detail of that, it might be helpful to understand why the Government have moved away from the idea of the public interest company. That move is not because a ''public interest company'' has a defined commercial meaning or because there is a requirement that a body be of a profit-distributing character. Companies limited by guarantee are perfectly capable of serving a public benefit. I worked for such a company in the voluntary sector. That company was similar to the organisation that we are to examine, in that it was a public benefit organisation, constituted from members who were drawn from across the country, each of whom subscribed £1. I find it difficult to understand why the Government have moved away from public interest companies. The purpose of the amendment is to try to find out the reasons why the Government have done that.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I note that the hon. Member for West Chelmsford, in moving the amendment, did not speak to amendment No. 66. I do not know whether that is because the amendment follows naturally. New issues are raised by amendment No. 66.

Simon Burns (Conservative, West Chelmsford)

Amendment No. 66 is consequential on amendment No. 65. If we were to have pressed it to a Division and won, there would have been consequential changes to schedule 1 of the Bill. We tabled the amendment for uniformity.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

In that respect, I understand why the amendment has been tabled. However, amendment No. 66 would remove the words ''is a body corporate'', presumably because the hon. Gentleman's idea of a public interest company would, by definition, not be a body corporate but something more than that. That is my understanding of the matter.

In our proposals for creating a diversity of providers or a mixed economy of providers in the health service—published in a document last year—we suggested that public benefit organisations be introduced. Our objection to the Government's proposals for NHS foundation trusts was not the status of the provider organisation. I do not want to rehash Second Reading arguments, but we believe that the Government's proposals for NHS foundation trusts are deeply flawed in several areas, but not in respect of their being public benefit organisations.

We prefer to use the more generic term ''public benefit organisation'', partly because—perhaps we share this belief with the Government—it will be very difficult, especially in the NHS, to interest staff and patients in something called an ''interest company'' rather than in something called a ''benefit organisation''. Perhaps that is a matter of appearance rather than law, but to gain support for necessary changes to the NHS—such as the introduction of different models of provider services—appearance is important.

If the legal definition of the foundation trust as contained in subsection (2) is that it is a body corporate, I want to go beyond the original question posed by this amendment and ask why the Government, in subsection (1), could not have used the term ''public benefit organisation'', and then defined it as a body corporate in subsection (2). It may be a minor issue, but if this is the basis for the Government's careful use of language—this is a Government who take great care to use language carefully—many people may not want to be part of a corporation when previously they saw themselves simply as a part of an NHS hospital.

The hon. Member for South Cambridgeshire (Mr.Lansley) made an interesting point about the difficulties and complexities of trying to create a public benefit organisation that mixes producer and consumer interests among the stakeholders. I agree with that. Our model for mutuals in the health service proposes that staff should be predominant in this mutual organisation and that the public interest should be served through massive decentralisation and democratisation of the commissioning side of the health service. If one ensures that the public interest is protected and that the public are able to participate democratically, playing an advisory role on the commissioning side—which provides almost all the work of even these public benefit organisations—it would not be necessary to try to shoehorn them into representation in the provider organisation in an untidy, clumsy and not particularly democratic way.

There will be a conflict, and although it may be considered appropriate to try to resolve conflict in the organisation rather than through the commissioning process, the whole argument for separating commissioning from provision is to separate clearly the consumers' or patients' interest from matters connected with the most efficient way to deliver to that commissioned service. In that respect, I share the view of the hon. Member for South Cambridgeshire, and we have published relatively detailed proposals on the issue.

I should be grateful to hear the Minister's response to the hon. Gentleman's question about whether there is a precedent for this type of mix. I should also like to know whether the mutuals that were referred to have generally been bottom-up and not imposed centrally. Do they look to ensure that innovation comes from staff, and that the commissioning side deals with the needs of patients and the way in which consumer interests can be represented in the process?

Gary Streeter (Conservative, South West Devon)

I am unclear about the legal standing of the new creations called public benefit corporations, but I am sure that the Minister will be able to tackle my specific questions. Can he give another example of a public benefit corporation created by statute? The question is not intended to trip him up; I simply do not know of one. Is there a precedent with a set of legal consequences that flow from it that we can study? I am not aware of one, but the Minister probably is.

To follow the comments of my hon. Friend the Member for South Cambridgeshire, do the Companies Acts apply to public benefit corporations? I suspect that they do not, and if that is the case, the point made earlier—that the law relating to the conduct of these companies will be a matter entirely for their constitutions and for general law; the law of contract and so on—is incredibly important.

I wonder whether the Minister has given due thought to the amount of legal time that will be spent creating constitutions for all of these organisations, and to what that will cost. Will there be central guidance? Schedule 1 sets out some of the requirements for a constitution, but I assure the Minister that the constitutions will turn out to be a great deal longer when expensive lawyers have finally drafted them.

Why did the Minister not allow units to be owned by companies limited by guarantee so that they could have the benefit of this country's well-established company law? If they are considered to be bodies corporate, why is the Minister insisting that the title in every constitution includes the words ''NHS foundation trust''? Trusts and bodies corporate are very different things under English law. I wonder whether it is not misleading to suggest that these are trusts, when in fact they are bodies corporate. Perhaps the Minister can explain what he thinks the difference is.

Do bodies corporate have limited liability? Presumably, at some stage, there will be a transfer of assets from whoever owns the hospitals now—regional health authorities, NHS trusts or the Government themselves—to these new bodies. Has the Minister given any thought to the kind of legal documents necessary for that transfer of assets? What plans has he made for that? Will it be a matter for the new units—the new bodies corporate and public benefit corporations—to arrange themselves? Will there be a set of legal documents that we can inspect to see what rights and liabilities flow with the transfer of these assets?

I hope that the Minister can answer some of these questions in his response. If he cannot, I suspect that it may take longer than expected to deal with this group of amendments because this goes to the heart of the matter. I also suspect that one of the reasons that a new form of body corporate appears to have been created is that the prospect of a Labour Government transferring the assets that make up the health service to companies limited by guarantee would have been a step too far for many Labour MPs.

I expect that exactly the same outcome will be determined by clause 1. It is important that we get to

the bottom of the precise legal nature of these new units and the consequences that flow from them. This must be done to satisfy our constituents as to where ownership lies and what legal consequences result from that, and in order to make an estimate of the kind of legal difficulties that may arise from creating a new species of body corporate with unknown legal consequences.

Roger Casale (Labour, Wimbledon)

I welcome you to the Chair, Mr. Griffiths. At this early stage of the proceedings, definitional points are important. We must use words that explain what we mean. Outside this place, the words that we use will be taken to mean certain things and used to interpret what we have said. On one level, this is a dry debate about semantics, but there are some important principles behind it that I am sure we will revisit many times during the proceedings. At this early stage, it is important that we send a clear message through the words that we use. I am sure that the Minister will do that when he responds to this part of the debate. We must get off on the right foot.

My support for this Bill is based on the premise that foundation hospitals represent a new form of public ownership. Much as Opposition Members might wish it to be, it is not a stepping stone towards privatisation of the health service. The hon. Member for West Chelmsford, who leads for the Opposition in this matter, said that there had been an evolution in the Government's thinking. In fact, there has been an evolution in the debate across the country as to how we think about these matters.

If one thinks about the nature of public ownership more generally and about what is in the public interest, one can see that, in the past, there were two opposed and stereotypical positions that perhaps did not correspond to the realities of the two parties. On the one hand, there were those who believed that in order to work for and serve the public interest, organisations had to be state-owned and state-controlled. I am not saying that that was ever the true position of the Labour party, but perhaps many people saw it that way. On the other hand, there were the more extreme elements in the Conservative Party in the 1980s who felt that in order for an organisation to serve the public interest, it had to be privately run and privately owned.

Simon Burns (Conservative, West Chelmsford)

The hon. Gentleman talked about the Government's thinking having evolved. Perhaps he will comment on the following statement:

''The PM has ordered Mr. Milburn to rename a draft Bill to enact his plans for new foundation hospitals . . . The Health Secretary has been told to rename the Health and Social Care (Foundation Companies) Bill amid fears it could derail the programme of reform. The word 'companies' will also be removed from the text of the Bill. A No 10 source said: 'These plans are controversial enough without calling hospitals companies. That was stupidity'''.

Roger Casale (Labour, Wimbledon)

I understood from the hon. Gentleman's earlier comments that he was so lacking in confidence in his ability to pick holes in the Bill at this stage of the proceedings that he wanted to pick over the entrails of internal discussions and debates. He knows very well that this issue has engaged people

across the country, not just in our political parties. It is perfectly natural that there should be different views, especially over the nuance that one gives to particular words.

To return to my original point, Mr. Griffiths, it is important that we get off on the right foot and explain clearly what we are doing through the words that we use and the way in which we define them. My understanding is that we are sending a clear message—I should be grateful to the Minister for confirming this—that foundation trusts are a new form of public ownership and not a stepping stone towards privatisation.

Simon Burns (Conservative, West Chelmsford)

Will the hon. Gentleman tell the Committee in a simple, single word—yes or no—whether he agrees with the No. 10 spokesman who said:

''These plans are controversial enough without calling hospitals companies. That was stupidity''?

Yes or no?

Roger Casale (Labour, Wimbledon)

I want to help the Committee, Mr. Griffiths, by taking interventions and responding to them as best as I can. I do not want to be rude to the hon. Gentleman, but he was rude to my colleague earlier. If one is rude about people, it just shows that one is unable to respond to the points that they raise. I do not want to do that. I will not delay the Committee by trying to give some sort of answer to a comment that has been taken completely out of context. My understanding of why we are talking about ''public benefit corporations'' as opposed to ''companies'' is that we are looking at a new form of public ownership. That is what is at stake here.

Steve Pound (Labour, Ealing North)

Does my hon. Friend agree that it is a tad churlish for members of this distinguished Committee to produce unattributed comments, which are not in any way sourced or identified, without giving the Committee the benefit of their origin? The comment as read to us was along the lines of , ''It is suggested that a spokesman said''. Does he agree that if we are to hear comments that muddy the waters, we should at least know where the mud comes from?

Roger Casale (Labour, Wimbledon)

As usual, my hon. Friend has put those points much more succinctly and clearly than I could have done. The point is interesting, as I am sure he agrees. It is interesting that, a short while ago, the Committee debated the programming motion. Of course, the Opposition are always very hot when it comes to procedural points. However, even at this early stage, the Opposition are going a little off the boil when it comes to substantial issues. They are trying to divert the Committee into a debate that I do not believe is necessary at this stage of the Bill's scrutiny; although I do not want to pre-empt your judgment, Mr. Griffiths. If the Committee is to make good progress, it must stick to the matters at hand and not speculate—as my hon. Friend the Member for Ealing, North (Mr. Pound) has rightly said—about the origin or otherwise of comments that remain unattributed.

Simon Burns (Conservative, West Chelmsford)

Will the hon. Gentleman give way?

Roger Casale (Labour, Wimbledon)

I want to make a little more progress on this point. We are talking about a new form of public ownership. We have always talked about a mix of public and private sectors in the structure and delivery of public services. The question is what particular mix of public and private is in the public interest, and how public interest should be defined. We should move away from the stereotype, where one side of the debate—wrongly, I believe—says that everything that is publicly owned and run or state-owned and run is good and everything that is privately owned and run is bad, or vice versa. There must be criteria to judge whether an organisation that exists to deliver public services does so in the public interest.

One such criterion must be efficiency, and if the Opposition want to emphasise and put forward the model of a public interest company as one that can deliver services more efficiently, that must be considered. We must always look at how services can be delivered more efficiently. However, I also believe—this is why I support the model—that there must be strong democratic input and control from local communities. The model of a corporation, and the word ''corporation'', better expresses that role. At one level, these are issues of semantics, which arise especially at the early stage of a debate, but behind contrasting ideas about what things should be called are contrasting ideas about what those things are.

To return to my original point, I am a strong advocate of foundation hospitals because I believe that they represent a new form of public ownership, which is better expressed by ''public benefit corporation'' than through the term ''public interest company''.

John Hutton (Labour, Barrow and Furness)

I agree with my hon. Friend the Member for Wimbledon (Roger Casale) that this is far from being a dry, esoteric or semantic debate. It is an important debate because clause 1, by definition, is an important part of the Bill. It brings into legal existence NHS foundation trusts, which, as my hon. Friend rightly said, will provide a new platform for public ownership of this vital public service.

Where I start on this issue is, I suspect, where all my hon. Friends start. The problem with public ownership in Britain is that it has become synonymous with state control. That is a mistake; it should not be synonymous. There should be greater elements of localism and local community and social ownership of public assets. In every other European country, that proposition is regarded as uncontroversial, and it should be regarded as such in the United Kingdom.

The second problem with our ownership of public assets is that the public does not feel that it owns them. That is something of a disadvantage to everyone who believes in the values and principles of public service.

Clause 1 tries to address those two issues with a new form of public ownership, as my hon. Friend rightly said in his well-chosen words.

When considering clause 1, it is tempting to talk about everything in part 1, because it all flows from and hangs on the first clause. That was the dilemma that the hon. Member for South-West Devon faced. He asked what effect the authorisation of an independent regulator would have on the assets and

property of the trust and how those assets are to be transferred. Those issues are dealt with in clause 7.

Gary Streeter (Conservative, South West Devon)

I did not mention the regulator specifically. I was talking about the transfer of assets from the Government to the new trusts.

John Hutton (Labour, Barrow and Furness)

Yes. I do not think that the hon. Gentleman has had a chance to consider the other provisions of part 1. The consequence of an authorisation is that the assets are transferred automatically. The NHS foundation trust takes over the assets of the NHS trust. There is no need for any consequential orders or any other complex legal processes. [Interruption.] If the hon. Gentleman is not satisfied with that, we can have a more detailed debate about clause 7.

For obvious reasons, I do not want to go through every clause now. In a nutshell, we have chosen to create a new corporation to allow NHS foundation trusts to come into being. The hon. Gentleman is right that companies legislation will not apply to these public benefit corporations. The legal framework for NHS foundation trusts is self-contained; it is contained in part 1 of the Bill.

Gary Streeter (Conservative, South West Devon)

This is important and I am sure it is relevant. Page 105 of the Bill refers to the Company Directors Disqualification Act 1986, which is amended in the schedule to this Bill to state that directors or officers of NHS foundation trusts must be treated as directors under that part of companies legislation. What excludes other companies from applying to these new bodies corporate?

John Hutton (Labour, Barrow and Furness)

It is a simple point: the fact that they are not companies prevents the application of companies legislation. I would have thought that that was apparent from clause 1.

Gary Streeter (Conservative, South West Devon)

What is the difference between a company limited by guarantee and the public benefit corporations that the Minister proposes to establish?

John Hutton (Labour, Barrow and Furness)

As I said, the difference is that public benefit corporations are not companies, so companies legislation does not apply.

Gary Streeter (Conservative, South West Devon)

They are bodies corporate.

John Hutton (Labour, Barrow and Furness)

Yes, they are bodies corporate, not companies. We could have a debate about that until the cows come home, and I sense from the look on the hon. Gentleman's face that that might be necessary at some point. However, they are not companies, and that is why companies legislation does not apply.

I want to go back to basics on this argument. I can tell from the faces of Opposition Members that that term may not be particularly welcome. However, this is a new form of public ownership, and it is right that we consider carefully what form the new bodies should take, and we have done that.

There are three important characteristics that we should keep in mind when we consider the new public benefit corporations. The public are looking for a new form of public ownership, and that is what these bodies represent. The corporate model that we choose should be capable of providing the right platform for the new democratic governance arrangements. As

many hon. Members have said, stakeholder involvement, through the new stakeholder councils, is a new form of public ownership.

The hon. Member for South Cambridgeshire thought that the interests represented on the boards of governors of foundation trusts would be irreconcilable between staff and patients. That might be placing it a little too highly. We are proposing a new form of governance for NHS trusts, which is not provided for in existing legislation, such as the National Health Service and Community Care Act 1990. Moreover, the arrangements for corporate governance are not contained in the main body of English company law.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the Minister. I do not think that I used the word ''irreconcilable''; it is merely that there would be differing interests. I suppose that the word that I should have used is ''unprecedented''. It is unprecedented that the Government looked to mutual status in other organisations as an example of how this organisation will work. However, other organisations do not seek to reconcile such a range of interests, and in theoretical terms they do not seek to incorporate into one mutual organisation the interests of both producers and consumers.

John Hutton (Labour, Barrow and Furness)

The hon. Gentleman is right, and that makes the case for a specific new form of body corporate and corporate status for these types of organisation. That is what clause 1 seeks to do. The first matter about which we need to satisfy ourselves when we consider the corporate form of NHS foundation trusts is whether we are creating the right platform for the new extension of the democratic franchise—the new democratic governance arrangements that we want to see extended to this part of the public sector. The current governance arrangements in companies legislation or, in fact, the existing governance arrangements that apply in NHS trusts, for example, would not provide us with that type of governance arrangement.

Secondly, it is important that the body supports the new operational and financial freedoms that we want NHS foundation trusts to enjoy. Thirdly, it is equally important that it should ensure proper accountability for the use of public assets that must accompany those new freedoms. All three characteristics that I look for in the shape and form of those new entities suggest the need for a specific and distinctive corporate form. That is precisely what clause 1 seeks to achieve.

The debate has focused largely on the use of the term ''company''. The hon. Member for West Chelmsford talked through some recent history on the use of that word, and that was an interesting lesson for all of us. However, NHS foundation trusts will not be companies as that term is used in English law. To apply that term in the way proposed by the hon. Gentleman's probing amendment would create serious difficulties, and that is precisely why we chose not to create foundation trusts as companies.

The term ''company'' has a distinctive meaning in English law. The hon. Gentleman's amendment would clearly raise some substantial questions—perhaps

more than it would answer. In particular, how much of the companies legislation we would want to apply or disapply to foundation trusts would clearly have to be considered. That is not at all clear in the hon. Gentleman's amendment. I know that it is a probing amendment, and I am not trying to deal with it in the manner of some smartypants lawyer. I am merely explaining to him, in a shorthand answer to his question and that of others, why we have chosen not to create NHS foundation trusts as companies. It is because the legal complexity of doing so would be enormous. There has already been some noise about how large the Bill is. I can assure the hon. Gentleman that the Bill would be substantially larger and more complex if we took his advice and established NHS foundation trusts as companies.

Simon Burns (Conservative, West Chelmsford)

I certainly accept what the Minister has said, particularly with regard to our amendment. However, given what he has said about the word ''companies'', why did the Secretary of State use the word last year and thus bring it into the frame?

John Hutton (Labour, Barrow and Furness)

We were considering that earlier. It is clear. We were right to consider all the options available to us. That was the context in which my right hon. Friend made his remarks. However, we have to convert that into workable legislation, and we have chosen to go down this particular route in clause 1, simply because it is the most coherent and least technically difficult option.

Andrew Murrison (Conservative, Westbury)

Is the Minister seriously suggesting that it would be more expensive to create these new corporations—I am not for one minute suggesting that we should—rather than create the companies that were originally talked about by his hon. Friends?

With regard to schedule 4, which enumerates the Acts of Parliament that will have to be tweaked and amended to allow the legislation to pass, will the Minister assure the Committee that he has considered the cost of constituting foundation hospitals as corporations rather than as companies?

John Hutton (Labour, Barrow and Furness)

The provisions in schedule 4 would have been necessary whatever route we took. I assure the hon. Gentleman that substantial changes would have had to be made to the companies legislation had we chosen to establish NHS foundation trusts as companies. I will give one important example, which throws some light on the issue of the correct corporate form for a foundation trust, and it relates to section 35 of the Companies Act. In the context of NHS foundation trusts, we consider it to be important that there should be a legal lock on the assets. The public should be confident that the assets necessary to deliver NHS services are preserved from being dissipated, distributed or lost.

A difficulty in making NHS foundation trusts companies is that we would come up against section 35 of the Companies Act, which gives companies a vires to distribute assets. We have been been asked why we did not set those up as community interest companies, but that would have presented a similar difficulty. We want a legal lock on assets. For example, if we set NHS foundation trusts up as companies, and

assets were inappropriately divided, distributed or lost, under the Companies Act they could not be recovered. It might be possible to withdraw the community interest company status from those organisations, but that would be retrospective—it would not provide an effective lock on the assets because such companies are deemed to have the vires to distribute those assets. That is the fundamental difficulty in choosing the form of a company for NHS foundation trusts, and if we had chosen that platform, we would have so tortured the meaning of ''company'' that it would cease to have any realistic application in that context. It would have been a label, but it would also have been an empty shell. Generally, it is wrong to torture data until they confess. One would get the result and the label that one wanted, but the meaning behind ''company'' would be lost in the process.

Gary Streeter (Conservative, South West Devon)

As we are breaking new ground in creating a completely new legal creature, I am sure the Minister understands why we want to probe the matter a little further. Do these new bodies corporate have limited liability, and do they have a legal entity that is capable of entering into contracts themselves rather than through the identity of their members?

John Hutton (Labour, Barrow and Furness)

The legal entity is that NHS foundation trusts will enter into the contracts. No limited liability applies to the trusts in the way in which the hon. Gentleman suggests—they are not limited liability companies. The hon. Gentleman asked a number of other questions, which I will address in my response because he is concerned about the cost of establishing NHS foundation trusts.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

Does the Minister agree that the other advantage of the phraseology that we have used to describe the company or corporation is that it is more consistent with the private Member's legislation introduced by my hon. Friend the Member for South Derbyshire (Mr. Todd)? That included the capacity for a corporation to have an asset lock.

John Hutton (Labour, Barrow and Furness)

My hon. Friend is absolutely correct. That is what we are trying to do, and it is precisely for that reason that none of the other alternatives, such as companies or industrial provident societies, held out the prospect of our being able to deliver what we want.

It is important that public assets are defended, and that should be built into the legal framework in which foundation trusts operate, and the Bill does that. Part 1 provides a legal lock on assets and on their use and disposal, and it is important that that should be clearly stated at the beginning. Therefore, in part 1 we provided the legal framework in which the new bodies corporate will operate, and we have done that effectively. I realise that there will be opportunities to discuss the other clauses, and I look forward to those debates.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I take the opportunity to apologise for the earlier beeping of my pager. I should be grateful if the Minister would repeat whether these new bodies have employers' insurance liability or are exempt from that.

John Hutton (Labour, Barrow and Furness)

I shall have to get back to the hon. Gentleman on that. I think that there is no requirement to have compulsory insurance, but that is also the position for NHS trusts. However, if I stand on my feet long enough, some advice will be given to me.

Chris Grayling (Conservative, Epsom and Ewell)

As foundation trusts are permitted under the Bill to make an investment, will the Minister clarify whether the organisations that a trust buys or in which it invests will also be exempt?

John Hutton (Labour, Barrow and Furness)

The exemption applies to NHS foundation trusts. I will have to return to that point and explain it in further detail. I am currently equipped to deal with clause 1, but these issues relate to schedule 4. The hon. Gentleman may at some point get to experience the difficulty that I am currently in.

Patsy Calton (Liberal Democrat, Cheadle)

I wish to explore further the public benefit corporation. The Minister said that that is a new body, and I wonder whether there are parallels with earlier bodies. Hospitals have been bodies corporate before; for example, the Manchester Royal infirmary was a corporation in the 1850s and beyond. Given the aftermath of the disposal of some of their assets, I wonder whether the locks that the Minister envisages being imposed will be sufficient to prevent some of the subsequent disposals from being a little difficult to follow. I am not concerned about the next five years when the legislation will be fresh in people's minds, but I am worried about the next 50 or 100 years and possibly even the next 200 years.

John Hutton (Labour, Barrow and Furness)

I very much doubt that this legislation will last for 200 years—I am not sure that that is likely. The National Health Service Act 1977 must have been amended 20 or 30 times during the past 25 years. That is a fairly regular event, and we are making further amendments today.

The point that I am trying to make about a legal lock on assets is simple; I do not want to make a technical, lawyer's argument. We have put together provisions on NHS foundation trusts in part 1 of the Bill, and I have great confidence that we have constructed a framework that will guarantee for the public those critical NHS assets that are necessary to be used in that way. When we reach the later parts of the Bill, the hon. Lady may want to table some amendments that would further strengthen the use and effect of those legal locks. We may even be able to support some of those amendments.

This has not been a dry or esoteric debate. It has been an important opportunity for us to set out some of the basic characteristics and features that we expect NHS foundation trusts, as bodies corporate, to demonstrate. It is worth reminding ourselves that NHS trusts are bodies corporate, as is almost every statutory corporation. However, the governance arrangements, the lock on assets and the accountability that needs to accompany NHS foundation trusts are new features. It is true that part 1 provides a unique legal framework. However, there is nothing particularly unique about the idea of a body corporate, because almost every statutory corporation is a body corporate. I make the point

again to the hon. Member for South-West Devon that they are not companies.

The hon. Gentleman also referred to the use of the words ''NHS foundation trusts'' in the title and constitution of NHS trusts, implying that that was somehow inconsistent with the concept of the trusts as bodies corporate. However, those words had to be used in the title and constitution, because NHS trusts are already bodies corporate. The hon. Gentleman is not right. He might have been referring to the concept that a trust other than an NHS trust is not a body corporate. That is obviously true. However, we are dealing with NHS organisations.

The hon. Member for West Chelmsford made quite a meal of the clause. He read more into it than was warranted by recent events or by the detail of the legislation. He was dancing on a pinhead, which is very unlike him, when he suggested that NHS foundation trusts will not be public interest organisations. However, I assure him that they will be public interest organisations: that is precisely what clause 1 delivers. They are public benefit organisations. [Interruption.] The hon. Gentleman says that those were not his words: he was quoting from the guide to NHS foundation trusts. My right hon. Friend made it clear that the trusts would be established as public interest organisations, and he questioned why they had not yet been established. However, clause 1 covers that.

Simon Burns (Conservative, West Chelmsford)

I listened carefully to the Minister, who was quite illuminating, but he has misunderstood the nature of my probing amendment. I sought to find out how the Government's thinking evolved from the Secretary of State's original statements for a public company as set out in the guide to the drafting of the Bill in which the definition changed to a public benefit corporation. I was not disputing what was meant—I was asking why and how that evolution had taken place. Was it merely a tidying-up and closing of loopholes in case of doubt and controversy, or was there a move away from the Secretary of State's original idea of how those bodies would be set up?

I am not sure that the Minister fully appreciated what I was saying, but that is by the by. I suspect that the language that the Secretary of State used was the problem and not the concept behind the language. The concept has changed little from January 2002 until the publication of the Bill, but the language has changed dramatically from the use of the word ''companies'' in the first instance to ''public benefit corporation.'' I think that that is what happened, but only the Minister can confirm that. However, he will wisely not even attempt to do that. I think that there was an unholy row behind the scenes because of the unfortunate use of the ''C'' word. Given that there was controversy in the ranks of the Labour party over the concept as outlined in clause 1, I believe that the Government wanted, for the sake of party management, to neutralise any chance of discord. That was part of the reason for this probing amendment, and I also believe that because of the following statement:

''Tony Blair has slapped down Health Secretary Alan Milburn over his plans to rebrand NHS hospitals as 'companies.' The PM has

ordered Mr. Milburn to rename a draft Bill to enact his plans for new foundation hospitals.''

That ironically falls in with the points that my hon. Friend the Member for South-West Devon made. The Prime Minister's order could be termed a diktat:

''The Health Secretary has been told''

—not asked or requested—

''to rename the Health and Social Care (Foundation Companies) Bill amid fears that it could derail the programme of reform. The word 'companies' will also be removed from the text of the Bill.''

The hon. Member for Wimbledon should listen carefully to the next bit because his hon. Friend the Member for Ealing, North, as he was digging deeper, tried to save him from his fate by putting words into my mouth that I never uttered. The hon. Member for Ealing, North said that I had read out: ''It was suggested that a No. 10 source''.

I did not say that at all. I said as a definitive fact:

''A No. 10 source said: 'These plans are controversial enough without calling hospitals companies. That was stupidity.'''

The No. 10 source was absolutely right—it was stupid, particularly in the context of the Labour party. Many Labour party members are new Labour. There may be fewer than six years ago—I do not want to intrude on private grief—but many are still new Labour. However, for those who are not new Labour, the word ''companies'' is anathema. It seems to be an unusual news management slip-up by the Secretary of State to have made that mistake. I suspect he had been lulled into the false sense of security of new Labour that companies are a good thing, forgetting that there are still dinosaurs roaming the Back Benches who might cut up rough with such language.

Steve Pound (Labour, Ealing North)

I am grateful to the hon. Member for giving way with his customary generosity. As one who styles himself as old new Labour, I recognise the dinosaur description. In the interests of transparency, honesty, decency and openness—all those characteristics with which he is inevitably and perpetually associated—will he identify which scurrilous rag printed those appalling statements? Who is the source? It is not good enough to purvey such tittle-tattle in a serious Committee.

Simon Burns (Conservative, West Chelmsford)

I am more than happy to do so. It was, as the hon. Gentleman calls it, a rag. I am surprised that he used that terminology, as he says he is partly old Labour. It was the broadsheet and the mouthpiece for the Chancellor of the Exchequer—the Daily Mirror. It is not a newspaper that is closely allied to the Conservative Party, but it is certainly allied to the Chancellor of the Exchequer.

To answer the hon. Member's second question in an air of openness and transparency, the source was Paul Gilfeather, whom I suspect is far better known to the hon. Member for Ealing, North than he is to me. It was not Paul Routledge, so presumably the report has greater credibility.

Steve McCabe (Labour, Birmingham, Hall Green)

As the hon. Gentleman has revealed that it was the Daily Mirror, and is now using that newspaper as an authoritative source, may I take him back to my earlier comments and point out that the Daily Mirror is also the respectable journal that

revealed Conservative plans to privatise the health service. It provided a revealing insight into the shadow Secretary of State's intentions. Does the hon. Gentleman support the newspaper's authoritative view on that subject?

Win Griffiths (Labour, Bridgend)

Order. This is a very interesting point of political debate, but it is not essential to the consideration of the amendment. We will not go down that path any longer.

Simon Burns (Conservative, West Chelmsford)

We certainly will not, Mr. Griffiths. So that I cannot be accused of being a coward, I hope that you will allow me to say to the hon. Member for Birmingham, Hall Green (Mr. McCabe) that the allegation he recounts is unadultered claptrap, as shown by the record of successive Conservative Governments since the second world war.

Returning to the purpose of the probing amendments, I am grateful to the Minister, because I accept that he is not prepared, however fascinating it would be to us, to share what went on behind the scenes that caused significant delays in the publication of the Bill. As the Minister knows, the guide was published in December 2002, about a week to 10 days before Christmas. It was expected that the Bill would be published in mid to late January. It was not. It became more and more apparent, probably because of the concept contained in clause 1, that there were serious problems and misgivings, not merely among Back Benchers. We did not get the Bill until the middle of March. Bills normally receive their Second Reading within two weeks of publication and First Reading. Easter was late this year, so that was not an excuse for any delays.

The argument escalated on the concept in clause 1—

Win Griffiths (Labour, Bridgend)

Order. We are straying too far from the purpose of the amendment.

Mr. Burns rose—

Gary Streeter (Conservative, South West Devon)

Will my hon. Friend give way?

Simon Burns (Conservative, West Chelmsford)

Yes.

Gary Streeter (Conservative, South West Devon)

The point about whether the original intention was that the organisations became companies is significant. As limited liability companies, there would have been a massive delay in drafting legislation that was originally designed to flow from the Companies Act, as we discussed earlier. That is one thing. An altogether new form of legal identity—public benefit corporations—is a legal creation without precedent. I imagine that there has been an extremely difficult and extensive legal operation behind the scenes.

Did my hon. Friend notice that the Minister did not answer my questions about the constitutions of these new creations, who was going to draft them and whether there would be guidance on the cost? If those organisations do not receive specific powers—either in statute or in those constitutions—no other body of law will give them the authority or the power to do anything, and many of their actions would, therefore, be ultra vires.

Win Griffiths (Labour, Bridgend)

Order. That was an intervention, not a speech.

Simon Burns (Conservative, West Chelmsford)

I did notice the points that my hon. Friend highlighted. On the first point about the delays for legal advice and drafting, I agree with him. However, my view is slightly different, because I believe that never in a month of Sundays would the Government conceive of setting up companies, with all the legal paraphernalia of the Companies Act, as mentioned by the Secretary of State. The Secretary of State used that as a shorthand term for a new concept, as outlined in clause 1; others—some of whom may be looking for a fight—misinterpreted it. It is a cock-up rather than a conspiracy.

The debate has been useful, and we have teased out much information from the Minister. Question marks, however, still hang over some of his statements. As the Bill progresses, we will have an opportunity to tease out further information. Therefore, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

George Young (Conservative, North West Hampshire)

I beg to move amendment No. 100, in

clause 1, page 1, line 7, at end insert

'and, subject to appropriate payment, for the purposes of the Health Services in Wales, Northern Ireland and Scotland'.

I share the euphoria that greeted the appointment of you, Mr. Griffiths, and Mr. Atkinson as Committee Chairmen. I hope that there is no disagreement among the Committee on what we are trying to do and that the debate on the amendment will not, therefore, take as long as the previous one. The difficulty with subsection (1), as I read it, is that it is somewhat restricted. It states that the

''NHS foundation trust is a public benefit corporation which is authorised under Part 1 to provide goods and services for the purposes of the health service in England.''

I think that the Government meant to say that the NHS foundation trust is a public benefit corporation in England that is authorised under part 1 to provide goods and services for the purposes of the national health service. Had the Government said that, I would have had no difficulty with it. As drafted, however, the final two words—''in England''—are an unnecessary geographical restriction.

I can foresee several difficulties. My constituency is not near the Welsh or Scottish borders, but there may be members of the Committee who are in that position. An NHS foundation trust could be in England, but close to Wales or Scotland. If a Welsh or Scottish person arrived as an out-patient at that trust, the administrators could say that, since the trust had been set up to provide goods and services for the purposes of the health service in England, the out-patient required a trust that had been set up to serve the health service in Wales or Scotland. It is quite wrong that there should be any uncertainty about the scope of the foundation trust.

If an English person who has been treated in an NHS foundation trust hospital is discharged and convalesces in Wales or Scotland, problems will arise

if the trust wants to continue to provide services for that patient. The goods and services would no longer be provided in England because the patient would be in Wales or Scotland. It is wrong that there should be a lack of clarity about that.

The Government have made it clear that they expect primary care trusts and ambulance trusts to apply for foundation trust status. It would be wrong for an ambulance trust that became a foundation trust not to be able to provide a health service in Scotland or Wales.

Patients are treated outside this country because of the waiting lists in various hospitals, so, clearly, certain goods and services are not provided in England. I hope that the Minister will accept the amendment, or provide one of his own, or explain that the geographical restriction that is manifest in the last two words, ''in England'', could not be deemed to have the impact that I have described. If I can obtain those reassurances, I am sure that the Committee will be able to make swift progress.

Jon Owen Jones (Labour/Co-operative, Cardiff Central)

I am surprised to find myself in agreement with a Tory amendment so early in the proceedings of the Committee. Perhaps my hon. Friend the Minister will explain how clause 1 allows foundation hospitals in England to treat patients from other parts of the UK. If the Minister does not have an explanation, I hope that he will either table an amendment of his own or agree to support the amendment tabled by the right hon. Member for North-West Hampshire (Sir George Young).

To illustrate that point, I refer the Committee to some geographical facts concerning the distribution of health care. The population of Wales is concentrated in the south and, to a smaller extent, on the northern coastline. The centre of Wales is the most sparsely populated area of the UK after northern Scotland. It is not possible—either through medical or financial efficiency—to locate acute hospital services in the mid-Wales region. Some services are located in Aberystwyth, but the rest of mid-Wales has no acute hospital facilities. The people of the Welsh border areas, such as Powys and Montgomeryshire, overwhelmingly access their acute services in English hospitals. If those hospitals become foundation hospitals and this part of the clause stands as it does, I do not see how those people will be able to gain access to those acute services.

In many parts of the UK, particularly in London, hospitals specialise in tertiary facilities. Those are facilities that are not distributed around the country because they are only needed by a small percentage of the population. Nevertheless, a Scottish or Welsh person with a rare disease should have access to those specialised facilities. If hospitals in London or elsewhere become foundation hospitals, apparently the clause will preclude the treatment of those diseases. I hope that the Minister has an explanation that will alleviate my concerns. However, the right hon. Gentleman has raised an important issue.

Chris Grayling (Conservative, Epsom and Ewell)

This is a concern of mine. We had extensive debates about border issues during the

passage of the Health (Wales) Act 2003, including the implications for those on both sides of the border. I commend my right hon. Friend the Member for North-West Hampshire for successfully tabling the amendment. He was more successful than me in finding words that would allow the Bill to be amended. I share his anxieties, and those of the hon. Member for Cardiff, Central (Mr. Jones), about the implications of the wording of the clause, which contains no cross-border provision.

We are still a United Kingdom. As the hon. Member for Cardiff, Central said, in areas close to a border, people depend on acute services across that border. The Bill contains no obligation to provide those services. There are certainly areas in which specific health priorities cannot be addressed as a result of the Bill's measures. There is no duty. As my right hon. Friend said, it is not simply a question of a duty to provide, but a duty to plan. Under the terms of the clause, a foundation trust that wishes to invest in and expand its services, based on its catchment area, cannot, strictly speaking, take into account the population on the other side of the boundary.

Let me go one step further than the hon. Member for Cardiff, Central, and give a specific example of an anomaly that may arise. Ministers will know of the Countess of Chester hospital trust, one of those that have applied, or sought to apply, for foundation status. Ministers will also know that the geography of Chester is such that almost immediately one leaves the city, heading west, one is in Wales. A significant part of the catchment area of that trust is in Wales. Indeed, most of the hospital's patients come from Chester, Ellesmere Port, rural west Cheshire and the Deeside part of Flintshire. The trust provides just over 600 acute hospital beds, which serve that area. The trust describes itself as one of the leading providers of acute services in the area. A substantial number of people depend on the hospital for their health care.

Andrew Murrison (Conservative, Westbury)

An even better example is the orthopaedic hospital at Oswestry, which is even closer to the Welsh border than Chester. The difference is that its tertiary centre provides highly specialised services to a wide area, which, I suspect, includes most of Wales.

Chris Grayling (Conservative, Epsom and Ewell)

Absolutely. That is a tremendously important and topical point. Committee members may have seen references at the weekend to a new arrival to the country's population; a young lady called Gemma. The Committee sends Gemma's parents our warmest congratulations on the arrival of their new child. Gemma's parents are the England football striker, Michael Owen, and his girlfriend. What makes Mr. Owen, his girl friend and their new daughter distinctive? The baby was born in the Countess of Chester hospital. However, the family lives in the small north Wales border village of Ewloe. Are we saying that one of England's leading footballers, who chooses to live across the border in Wales, should not be part of any future planning for his local hospital? Are we saying that the national health service should not encourage Mr. Owen to attend his local hospital?

Andrew Lansley (Conservative, South Cambridgeshire)

I hesitate to speak, as I may be anticipating something that my hon. Friend intends to

say. However, I may be more aggressive than he is about such matters. With regard to the Countess of Chester hospital, I had assumed that, rather than my hon. Friend, the hon. Member for City of Chester (Ms Russell), who is a member of this Committee, would be making these points. After the hon. Lady spoke in the House the other week—an almost unprecedented event—I thought that she might have made a contribution to the Committee on behalf of her constituents; but no, she is not to be found at this moment.

Chris Grayling (Conservative, Epsom and Ewell)

I am grateful to my hon. Friend for that insightful comment. We are graced with occasional appearances by the hon. Member for City of Chester. The House is enriched by those occasional contributions, and it is a shame that they cannot be more frequent.

The implications of the Bill are more significant than its impact on the provision of treatment. We must consider the constitutional provisions of the Bill, and the establishment, constitutions, and membership of the trusts. If the Bill makes it the responsibility of foundation trusts in England to provide services for England only, how will the membership of a border trust be determined? Are we denying people in Wales who live just across the border from the Countess of Chester hospital NHS trust the right to be members of that trust?

If we are not denying people that right, are we creating a situation in which a person who lives in north Wales could become a member of the board of the trust of the local hospital, but would have a duty not to provide health care planning and health care provision for the community in which he or she lives? If that were the case, the situation would be nonsensical and absurd.

Fundamentally, if the Government's aspirations were achieved and foundation hospitals were to offer a first-rate service, would that in itself not cause distortions in the provision of health care, as people would flood across the borders to hospitals in England to seek treatment? The amendment would allow the hospitals to provide that service, and to be paid for doing so. Without it, would there not be a nonsensical situation in which hospitals would be unable to do the job that is normally asked of them, which is to provide a universal, high-quality service to all patients who can get to the hospitals?

This element of the Bill—inadvertently, I am sure—will create anomalies in border regions. It will create difficulties for the people who live in those areas, and it will create constitutional contradictions. I hope that Members will recognise that, and concede that the amendment tabled by my right hon. Friend the Member for North-West Hampshire is a simple way of rectifying that situation.

Andrew Murrison (Conservative, Westbury)

The debate brings new meaning to the phrase ''médecins sans frontières''. It seems that many of the Bill's provisions would establish artificial boundaries, so I am surprised that there are several items in the Bill that cut across some laudable actions

that the Government are trying to bring forward, particularly in relation to primary care and clinical networks.

With regard to medicine, geographic boundaries are becoming almost an irrelevance. I am happy to say that the Government are encouraging clinical networking so that specialists, whether they be in Scotland, Wales, Northern Ireland or England, can collaborate at a highly specialised tertiary level. Amendment No. 100 would encourage trusts to operate in a collaborative way. It would dissolve a barrier that the Bill appears to be setting up. Several hospitals that operate in this way have been mentioned. The classic tertiary centre is probably the Royal Brompton hospital, which provides highly specialised services of a pioneering nature to patients throughout the United Kingdom.

It makes no sense for legislation to be drafted in such a way as to make it inward looking, focusing purely on England. That would go against the grain of some of the good and laudable action that the Government are trying to encourage with regard to clinical networking and the dissolution of some of the barriers that have traditionally existed in the NHS. In all candour, I encourage Members to study the amendment closely. It would be a positive step that would work with, not against, the grain of what the Government are trying to achieve.

Andrew Lansley (Conservative, South Cambridgeshire)

I support amendment No. 100. It seems necessary, and my right hon. Friend the Member for North-West Hampshire set out the argument very clearly, as did my other hon. Friends.

At the risk of antagonising Labour Members, when the Committee was constituted I considered the extent to which its members represented the hospitals that had to consider applying for NHS foundation trusts in order to resolve issues in practical terms. That is a practical example of the way in which a hospital would deliberate matters according to its own circumstances, as the Countess of Chester hospital would do, and reach a conclusion.

I approach the matter from that point of view. Two hospitals in my constituency, the Addenbrooke's NHS trust and the Papworth Hospital NHS trust, have applied for NHS foundation trust status. On the Government's side, I think that only the hon. Member for City of Chester has an applicant trust in her constituency. It seems to me desirable that the hon. Lady should be here to represent that applicant's point of view as we begin the discussion.

Steve McCabe (Labour, Birmingham, Hall Green)

I can offer the hon. Gentleman some reassurance, because I have here the preliminary application to the Department of Health for NHS foundation trust status from the University Hospital Birmingham NHS trust, which is my local hospital. There are people there with whom I have a great deal of contact and whose interests are deeply involved with the Bill.

Andrew Lansley (Conservative, South Cambridgeshire)

That may be so. I understood that that hospital is not physically located in the hon. Gentleman's constituency, but is in the constituency

of the hon. Member for Birmingham, Selly Oak (Lynne Jones). We could engage in a debate about geography, but perhaps the hon. Gentleman will correct me if I am wrong.

Steve McCabe (Labour, Birmingham, Hall Green)

The trust serves south Birmingham, which incorporates more than one constituency. I should have thought that the hon. Gentleman would have experience of such a situation, in common with several others.

Andrew Lansley (Conservative, South Cambridgeshire)

I agree entirely with the hon. Gentleman's point that the area served by any individual NHS trust is very wide. That is precisely the point that we are discussing. The hon. Member for Cardiff, Central talked about the amendment in terms of the geographical area that is to be served by hospitals. As a specialist hospital, Papworth Hospital NHS trust serves patients from throughout the country. Tertiary hospitals are not located in London only. More heart transplants are done at Papworth hospital than in any other cardiothoracic institute in the country. I take the point that it has a wider range and I hope that we will bring those experiences to bear. However, as the Member of Parliament in whose constituency the Addenbrooke's and Papworth hospitals are situated, I regard myself as having a special responsibility towards them.

Jim Dowd (Labour, Lewisham West)

I am somewhat startled by the hon. Gentleman's ludicrous parochialism. Two hospitals in south London, King's College hospital and Guy's and St. Thomas' hospital, have indicated their intention to apply for foundation trust status. They serve large numbers of people across south London and beyond. Most people in the west of my constituency go to King's rather than to Lewisham hospital. Lewisham hospital is itself a three-star hospital. It will be watching keenly to see how events unfold in order to decide whether to apply for foundation trust status. The hon. Gentleman is being far too narrow in his definition of who has an interest in their local hospitals.

Andrew Lansley (Conservative, South Cambridgeshire)

I am sorry to be chided by the hon. Gentleman, whose opinion I always value, because I was seeking not to exclude the interests of hon. Members whose constituents are served by those hospitals, but to emphasize the responsibility of those of us who have such important institutions in our constituencies. In that context, I am sure that he will not dispute the responsibility that, for example, the hon. Member for Vauxhall (Kate Hoey) has towards Guy's, St Thomas' and King's College hospitals. On Second Reading, I noticed how anxiously she sought to speak in the debate but did not have the opportunity to do so. On reflection, that was a pity.

I have been chided from the Labour Benches, but I hope that we can agree about the breadth of service offered by NHS trusts that are applying to be NHS foundation trusts. That service spreads across something so ephemeral as a constituency boundary to something so substantial as a boundary between England and Wales, or between England and Scotland. There is everything to be said for our agreeing that the amendment entirely captures that

point and gives effect to it, and I hope that the Minister will agree to it.

Gary Streeter (Conservative, South West Devon)

I will make a very brief point, harking back to some of the points that I sought, rather inadequately, to make in the previous debate. The first thing that smart new governing bodies of the new corporations will do as they assemble for the first time is to take legal advice on the extent of their powers and responsibilities as public benefit corporations. They will ask their lawyers what services they will be permitted to offer. The lawyers will say that, pursuant to clause 1 of the Bill—or Act as it will then be—they will be authorised to provide goods and services for the purposes of the health service in England. Any lawyer will ask whether there is a health service in Wales. There is a separate health service with hospitals, GPs and primary care trusts. It cannot therefore be legally possible—indeed, it is inconceivable—that a lawyer would not advise the Government body that it is not authorised under clause 1 to provide services for patients from primary care trusts in Wales.

There is a simple remedy for that. Even if part of the confusion that I fear might arise does occur, and given that we are trying to create a new class of legal corporations, the wording of this statute and the constitutions are critical to guide the activities of those new bodies. Accountants will advise governing bodies that, if they provide services to patients from primary care trusts in Wales and are not paid, they probably will not have the right under clause 1 to collect payment through legal channels as they would if they were acting within the scope of their legal powers. That is the seriousness of the situation. It should not be forgotten that new bodies corporate and hospital trusts often look for ways to save money as the year-end approaches. When offering services outside the scope of one's powers, that is the first thing that one must do.

I know that the Minister will be reluctant to concede ground this early in the process, but this is a serious issue. It is possible that trusts throughout the country will be legally advised that they cannot offer services to people outside England. The solution to that is to support the amendment now.

John Hutton (Labour, Barrow and Furness)

I am grateful to the right hon. Member for North-West Hampshire for tabling the amendment and for the way in which he has brought the issue to the attention of the Committee. I examined the amendment carefully when it was tabled. In introducing these proposals, it is not our intention to make it impossible for an NHS foundation trust based in England—where they will all be based, as the right hon. Gentleman understands—to provide NHS services to patients referred from Wales, Scotland or Northern Ireland. If that was the effect of clause 1, I would accept the amendment, but that is not its effect.

Clause 1 must be read in conjunction with clause 14, particularly clause 14(2), which sets out the purposes for which a trust can be authorised to provide services. The right hon. Gentleman must consider the two together. Clause 1 makes it clear that the purpose of the NHS foundation trust is to provide goods and services for the purpose of the health service in

England. It does not say that it cannot treat patients referred to it from Wales, for example. The services are provided in England irrespective of where the patient comes from.

To put the point beyond any doubt, we have tabled Government amendment No. 148, which will be discussed later. That amendment will make it clear and put it beyond any reasonable doubt that an NHS foundation trust is empowered to provide services to patients from other parts of the United Kingdom.

Chris Grayling (Conservative, Epsom and Ewell)

Surely the issue is about the duty, responsibility and the costs of making provision. If there are competing interests or priorities, do the clauses not place a duty on an NHS foundation trust to put the interests of the English population ahead of the interests of the Welsh population—for example, if there are two competing needs, one more related to Wales and the other more related to England?

John Hutton (Labour, Barrow and Furness)

The clause makes it clear that the primary purpose of the NHS foundation trust is to provide services for the purpose of the health service in England. They are all trusts based in England.

That is the starting point. However, as his right hon. Friend the Member for North-West Hampshire and other hon. Members were trying to argue, the Bill does not preclude as a matter of law any NHS foundation trusts in England from treating patients referred to them from Wales, Scotland or Northern Ireland.

Jon Owen Jones (Labour/Co-operative, Cardiff Central)

Will the Minister give way?

John Hutton (Labour, Barrow and Furness)

I will in a minute.

I stress that that is not the effect of clause 1, and if there is any reasonable doubt about that, it is dealt with in amendment No. 148.

Jon Owen Jones (Labour/Co-operative, Cardiff Central)

The Minister is explaining why it is possible for foundation hospitals to continue to provide services. However, he has not yet explained why accepting amendment No. 148 would make that any less likely. In fact, given that it would reword the beginning of the Bill, accepting the amendment would make that much more likely.

Earlier, I referred to the mid-Wales population in the borders, a region that can also be referred to as the marshes. Those people rely on acute hospital facilities in the large towns in Herefordshire and Shropshire and in Chester. Of course, the large towns exist because of the castles in those areas. The population depends on those services equally, regardless of whether the hospitals are to the west or the east of the towns. I would prefer to see some reference to that at the beginning of the Bill, rather than in later Government amendments.

John Hutton (Labour, Barrow and Furness)

I understand the point that my hon. Friend is making. However, although the provision appears later in the Bill, clause 1 and clause 14 are connected intimately, and it is simply a fact that, when preparing a Bill, not everything can be included in clause 1. That the provision is contained in clause 14 does not in any way affect my argument.

We have worded the Bill carefully to make it clear that NHS foundation trusts based in England—and we all know the history and argument behind that—can still treat patients from Wales. The extent to which that happens will be determined by the commissioning arrangements entered into with Welsh NHS bodies and, in the case of the border between England and Scotland, the arrangements between English NHS foundation trusts and Scottish commissioning bodies. Nothing in the Bill would preclude the hospitals to which my hon. Friend the Member for Cardiff, Central referred from treating Welsh patients, as they do at present.

Simon Burns (Conservative, West Chelmsford)

If it is in order, will the Minister clarify why he thinks that amendment No. 148 to clause 14 deals with, and clears up, the problems contained in the amendments tabled by my right hon. Friend the Member for North-West Hampshire? Is it because of the phrase ''principal purpose'' that is contained in that amendment?

John Hutton (Labour, Barrow and Furness)

Yes, I think it is. We will have an opportunity to debate amendment No. 148 when we get to clause 14. I could go on making the point until the cows come home. My hon. Friend the Member for Cardiff, Central has asked me to accept the amendment from the right hon. Member for North-West Hampshire. I hope that he does not take this the wrong way, but I prefer my own amendments to those proposed by Conservative Members.

If I felt genuinely that the right hon. Member for North-West Hampshire had hit on something that we had not spotted, or that there was a loophole, we would take action. If the right hon. Gentleman's amendment were the best way forward, I would have no difficulty in urging the Committee to accept it. That is not the case. The Bill is absolutely clear. What I say today can help the lawyers to determine any ambiguity, and the hon. Member for South-West Devon knows that that is the case.

Chris Grayling (Conservative, Epsom and Ewell)

When we debated the Health (Wales) Bill and public health issues relating to cross-border areas, I put it to Welsh MPs that surely all illnesses apply across the United Kingdom, and the hon. Member for Cardiff, Central and some of his colleagues made the point that there are illnesses that relate to the limestone industry in north Wales that are peculiar to north Wales. Surely the effects of this provision would be that a tertiary centre in England, which might provide an important service for patients in Wales with particular local conditions, would not be able to make those patients a clinical priority ahead of those involved in a comparable situation in England. Therefore, the English patients would always be the number one priority. That must be the case.

John Hutton (Labour, Barrow and Furness)

I do not think that that is the case. Those issues will, to a large extent, be determined by the commissioning arrangements into which the NHS foundation trust has entered. It will be about agreeing with, for example, a Welsh NHS commissioning body to treat a certain volume of patients within a certain time.

I understand that the hon. Gentleman's intention is to be helpful and to ensure that we do not lose a very important characteristic of the NHS—that it is a comprehensive national service. We do not want to lose that either, and there is nothing in the Bill that calls that into question. Conservative Members have read too much into the expression ''in England'' by thinking that it refers only to patients who live in England. That is not how the clause has been constructed.

We should not lose sight of the fact that both the Welsh Assembly and the Scottish Executive, given that responsibility for the NHS is a devolved matter, have decided that they do not want NHS foundation trusts to be established in Wales or Scotland. That is their decision, and that is fine. We have no difficulty with that. However, in establishing NHS foundation trusts in England, we are not precluding cross-border referrals. That is a matter for the commissioning process. There is nothing in the Bill that excludes or takes away from an NHS foundation trust the power to enter into such an agreement.

Jon Owen Jones (Labour/Co-operative, Cardiff Central)

Surely the problem would not exist, at least with regard to Wales, if, instead of the Bill specifying that foundation hospitals would apply in England, it specified that foundation hospitals could apply in England or Wales, and, as other Bills have done, allowed the Welsh Assembly to enable or not enable that provision.

John Hutton (Labour, Barrow and Furness)

I agree that that is a possibility, but it is not what the Welsh Assembly has asked us to do in this Bill, and we intend to respect its judgement. Responsibility for the NHS is a devolved matter. It is a matter for the Welsh Assembly to decide the scope of the provisions on NHS foundation trusts and whether they apply to Wales.

However, the point that has been raised in this debate is a simple but different one: it is about whether, in the Bill, an NHS foundation trust has the legal authority or powers to treat NHS patients referred to it from any other nation of the United Kingdom. For the avoidance of doubt, I make it clear for the fourth time that there is nothing in the Bill to preclude an NHS foundation trust from treating a patient from Wales, Scotland or Northern Ireland at any of its hospitals in England.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I have been listening carefully to the arguments from both sides of the Committee on precisely that point. I agree with the Minister's view that the power lies with the commissioners, and that is why we have previously debated the fact that the democratisation of providers rather misses the point. However, I wish to draw his attention to the problem of his using expressions such as ''patients from Wales in England'', which I understand. What about the problem of people bidding in Wales for outreach services to be provided in Wales? Is there not a danger that the trust, if faced with competing priorities for the provision of services, may feel bound by the legislation to prioritise the provision of services in England to English and Welsh patients, rather than the provision of outreach services in Wales to Welsh patients?

John Hutton (Labour, Barrow and Furness)

I shall take advice, because I am not sure whether any NHS trust in England provides facilities in Wales, Scotland or Northern Ireland. I do not think that that is currently the case. If I am wrong, I will come back to the Committee and advise it about that.

With great respect to the hon. Gentleman, we are not dealing with that matter. We are dealing with the direct and simple point raised by the right hon. Member for North-West Hampshire that, under the provisions of clause 1, an NHS foundation trust would not be allowed to treat a patient from Wales, Scotland or Northern Ireland at any of its facilities in England. I cannot make it any clearer than I have done already. For the fifth time, I can tell the Committee that that is not how the Bill is constructed, and it is not how it should be interpreted. Government amendment No. 148 puts that beyond any reasonable doubt. Just to show the Committee my friendly, caring face, I am more than happy, particularly in relation to the points that my hon. Friend the Member for Cardiff, Central has raised, to consider the issue again, and I shall do that. However, for the sixth time—I am enjoying this—I do not believe that such an amendment is necessary, for the reasons that I have explained. If I can put that even further beyond any doubt, I shall be happy to do so.

Gary Streeter (Conservative, South West Devon)

I do not wish to prolong the discussion, but I want to make a very important point. We are talking about whether or not something is authorised, and the Minister keeps saying that there is nothing in the Bill to preclude it. Those two things are, of course, very different. We are talking about whether there is authorisation in the Bill for foundation hospital trusts to service people from, for example, Wales. Of course they are not precluded from doing that, but that is not the same as being authorised. I believe that amendment No. 148 introduces a new ambiguity. It does not clarify the matter at all.

John Hutton (Labour, Barrow and Furness)

I have now lost patience with the hon. Gentleman, because he knows absolutely nothing about the Bill. It is clear from his intervention that he does not understand the importance of authorisation for legitimising the activities of an NHS foundation trust. We will listen to the hon. Gentleman when he has done his homework more thoroughly and is familiar with the terms of the Bill. The authorisation in clause 14 is critical, and the authorisation in clause 14(2) would allow an NHS foundation trust to treat patients from other parts of the national health service.

Andrew Murrison (Conservative, Westbury)

The Minister is being dismissive, but I think it is an important point. I wish to pick up the points that the hon. Member for Oxford, West and Abingdon (Dr. Harris) raised when he mentioned outreach services. I suspect that when the Minister does his homework, he will find that there are outreach services from the hospital in Oswestry, which I mentioned earlier—I would be surprised if there are not. However, that is not the point. When the Minister looks into this issue again—I sincerely hope that he does—he should consider possible future provision, because the people who will be governing the hospitals

might refer to the Bill when they are designing future service. It would be a great pity if they felt constrained by the tenets of the Bill, so I hope that the Minister will bear in mind the future as well as the present.

John Hutton (Labour, Barrow and Furness)

I respect very much the hon. Gentleman's views. Perhaps I am wrong; perhaps there are such outreach services—it is nice to be corrected on that. However, there is nothing in the Bill that would legally preclude or prevent an NHS foundation trust from operating outreach services in Wales, Scotland or Northern Ireland. The point made by the hon. Gentleman for South-West Devon about the difference between precluding and authorisation is not true. If the NHS trust is not authorised to provide the service, it is precluded from doing so. The important point is to be clear about the general parameters that are being set. There is nothing in the Bill that would preclude an NHS foundation trust established in England from providing outreach services in Wales, Scotland or Northern Ireland. There is nothing in the Bill designed to have that effect, and if there is, I will remove it. I do not think that I can be clearer than that.

The hon. Member for West Chelmsford did not hear all the debate, as I understand he nipped out for a fag. Let me remind him of the NHS smoking helpline—0800 169 0169—which he should call straight away.

George Young (Conservative, North West Hampshire)

I think that we caught a bigger fish with the amendment than I first thought. I hope that those who live in Wales and Scotland will note the magnanimity of English Conservative Members who are seeking to ensure that the services based in our hospitals are made available to those who live in Wales and Scotland. I did not think I would have to tell the Minister that this is a ''national'' health service. We should not be having an argument about whether people from one part of the country can have access to a hospital in another part of the country. There should be no scope for doubt at all.

The Minister said that if I had hit on something that he had not thought of, he would take steps. However, there was some lack of clarity in the Bill that was originally approved by the House. I tabled an amendment and the Government then tabled theirs, and they have used their amendment as an excuse for not going for mine, so it seems that I did hit on something in the Bill that was less than clear.

John Hutton (Labour, Barrow and Furness)

I do not want to sound petty, but I prepared and tabled my amendment before the right hon. Gentleman did.

George Young (Conservative, North West Hampshire)

I invite the Minister to withdraw what he said. As the Division result was read out, I was sitting at the Clerk's Table. My amendment was tabled a few seconds after my hon. Friend the Member for Epsom and Ewell tabled his. He had not been sitting there as long as I had, but in deference to the Front Bench I allowed him to table his amendment before mine. On reflection, the Minister might like to withdraw his assertion that he tabled his amendment before I tabled mine.

John Hutton (Labour, Barrow and Furness)

I got a bit excited, and I certainly do withdraw that comment. However, our amendment was prepared early because, as he would know from being an experienced Minister, we had been through the Bill several times to make sure that we had got it right. We had alighted on the problem, and we thought that we were addressing it with our amendment. I am prepared to accept that he tabled his amendment first, but we had been preparing ours for some time.

George Young (Conservative, North West Hampshire)

I would hope that the Government had been preparing the Bill for some time, far longer than Conservative Members who saw it only when it was published.

I want to make a suggestion that gets around the problem. I have looked at the Government's proposed amendments to clause 14. The difficulty is that that clause refers to what the authorisation may say. Of course, here we are in the hands of the regulator. Clause 14(1) says that an authorisation ''must'' authorise the provision of goods and services in England. Clause 14(2) goes on to say that it ''may'' also authorise the trust to provide other goods and services. There is some ambiguity. If the word ''must'' were used in clause 14(2), there might be less cause for doubt. The way around that is for the Minister to reflect on what I said earlier. The words ''in England'' should be removed from the end of subsection (1) and put after ''public benefit corporation''. That makes it clear that the foundation trust is a public benefit corporation in England, which is the only place in which public benefit corporations are allowed under the Bill. The trusts are authorised to buy goods and services for the purposes of the health service. If the Minister were to say that he would smile on that and table a Government amendment to that effect at a later stage, I would regard that as a moral victory and would not pursue the matter any further.

However, I do not see a smile on the Minister's face. We might be able to make progress if he were to say that he would consider such a solution.

John Hutton (Labour, Barrow and Furness)

I am prepared to consider that suggestion.

George Young (Conservative, North West Hampshire)

Against the background of what the Minister has said, it would be churlish to push the matter any further. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman, being of the opinion that the principle of the clause and any matters arising thereon had been adequately discussed in the course of debate on the amendments proposed thereto, forthwith put the Question, pursuant to Standing Orders Nos. 68 and 89, That the clause stand part of the Bill.

Question agreed to.

Clause 1 ordered to stand part of the Bill.

Schedule 1 - Constitution of public benefit corporations

Hazel Blears (Labour, Salford)

I beg to move amendment No. 151, in

schedule 1, page 93, line 9, at end insert

'and, if the corporation is an NHS foundation trust, its name must include the words ''NHS foundation trust'''.

I join all of the other Committee members in welcoming you, Mr. Griffiths, as Chairman of this Committee. I have not had the pleasure of serving on a Committee with you as Chairman, and I look forward to doing so over the coming weeks, if not months, by the time the Bill leaves Committee.

The amendment seeks to include the words ''NHS foundation trust'' in the description of the public benefit corporation. The purpose of the amendment is to make it crystal clear that NHS foundation trusts will remain fully part of the NHS. It is important that that is clear to users, staff, patients and the local community. When patients access services, it is important that they have the reassurance of knowing that they are receiving NHS care and that that care will be provided to national standards, will be free at the point of use, and will reflect the values of the NHS. For that reason, the amendment requires that all NHS foundation trusts include the words ''NHS foundation trust'' in their names.

The amendment will serve the additional purpose of raising people's awareness of their foundation trust. I hope that that will encourage them to begin to take an active part in its governance. That will serve the useful purpose of raising awareness of this new form of public benefit corporation right across the community.

Simon Burns (Conservative, West Chelmsford)

I am very grateful to the Minister for that explanation, which confirmed my views of the amendment. It is in many ways a technical or drafting amendment, but with far-reaching implications behind that technicality and drafting.

Whether it achieves its objective of further linking people to the ownership of their local health facility remains to be seen. It would have been odd if there had not been a requirement for the title to be an important part of the organisation. For that reason, the Opposition will not seek to oppose the proposal. I fully agree with the sentiment that the NHS should be free at the point of use.

Patsy Calton (Liberal Democrat, Cheadle)

The Liberal Democrats support the proposal. There are practical, far-reaching implications to the naming of an NHS foundation trust, particularly if I revert to my point about the protection of assets. It is important that all the assets of an NHS foundation trust are clearly labelled as being part of the assets of an NHS foundation trust.

Amendment agreed to.

George Young (Conservative, North West Hampshire)

I beg to move amendment No. 97, in

schedule 1, page 93, line 9, at end insert

'and shall define ''public constituency''.'.

Win Griffiths (Labour, Bridgend)

With this it will be convenient to discuss the following amendments:

No. 125, in

schedule 1, page 93, line 12, leave out from 'area' to end of line 13 and insert

'covered by a primary care trust or primary care trusts for which the corporation is the principal provider of hospital based services, or'.

No. 175, in

schedule 1, page 93, line 15, leave out 'may' and insert 'shall'.

No. 118, in

schedule 1, page 93, line 17, after 'including', insert

'their family members involved in their attendance and care as patients or other'.

No. 144, in

schedule 1, page 93, line 17, at end insert—

'(2A) A ''carer'', for the purposes of subparagraph (2), means an individual aged 16 or over who provides or intends to provide substantial care on a regular basis for the patient and does not provide the care in question.

(a) by virtue of a contract of employment or other contract with any person; or

(b) as a volunteer for a voluntary organisation as defined in the National Assistance Act 1948.'.

No. 119, in

schedule 1, page 93, line 18, leave out 'Subparagraph (1)(a) does' and insert

'Subparagraphs (1)(a) and (2) do'.

George Young (Conservative, North West Hampshire)

Amendment No. 97 is one of several amendments that address a key issue in schedule 1—the definition of a constituency. That is a concept with which the Committee is familiar, but one which is rather vague in the Bill. ''Public constituency'' is referred to in schedule 1, paragraph 3(2), but it is not defined. To get an idea of the Government's intentions, one must read ''A Guide to NHS Foundation Trusts'', which was published in December 2002. In the guide, the Government set out who should be eligible for membership of an NHS foundation trust. We are interested in schedule 1, paragraph 3(1), which covers members of a public benefit corporation.

In ''A Guide to NHS Foundation Trusts'', it is clear that the trust will define its own constituency within broad parameters. Paragraph 2.7 of the guide states:

''There will, however, be a requirement that the membership community must include people living in the area covered by the local authority in which any of the facilities run by the NHS Foundation Trust is located.''

For example, the people who use the facilities at Moorfields eye hospital live in a large number of local authority areas. Paragraph 2.7 goes on to say:

''An NHS Foundation Trust will be expected to extend the definition to cover neighbouring local authorities''.

I think that we understand that. At the end of paragraph 2.7, it states:

''The policy is about inclusion rather than exclusion so the aim is to be as flexible as possible.''

Paragraph 2.8 goes on to say:

''An NHS Trust will be expected to set out the boundaries of its proposed membership community in its application for NHS Foundation Trust status.''

It goes on to make suggestions about advertising eligibility for membership and about being proactive. The foundation trust will have a great deal on its mind. It will be navigating uncharted waters, as there is, apparently, no precedent for the type of organisation that we are debating. There should be clarity on how a prospective foundation trust sets about drawing up this key part of its constitution.

Paragraph 48 of the explanatory notes repeats the minimum eligibility criteria that a foundation trust must include in its public constituency, but it does not shed much more light than that.

Last Wednesday we had a fairly devastating critique of the Government's performance on this when the Health Committee published its report. In paragraph 37 of that report, the Health Committee described the arrangements that the Government have put into the Bill on this matter as ''fragmented, confusing and inequitable''. On pages 15 and 16 of the report, the Committee posed some questions on the definition of a constituency, to which it is reasonable to expect the Government's response in this debate.

The first point that the members of the Select Committee make is that, unlike any other democratic organisation in this country, the foundation trust will define its own constituency. We would all like to define our own constituencies, and if we did that, we would all be here for a long time—in fact, for as long as we wanted. It is unusual in the name of democracy to set up a new democratically elected body and then tell it that it can choose its electorate. There is something incestuous about leaving a democratic body so free to decide who shall have a mandate and who shall be part of it.

Paragraph 34 of the report states that

''the Guide is not clear whether people will be able to be members of more than one Foundation Trust''.

I assume that the answer to that is yes, but it would be helpful if the Minister would confirm that. Questions are posed in that paragraph as to whether membership should be restricted to certain groups of the population. It states:

''Will one-off users of A&E services be offered membership or will this be restricted to patients being treated for an ongoing problem?''

It would be helpful to have the Minister's views on that issue.

Andrew Murrison (Conservative, Westbury)

One particular group whose representation we may wish to consider is, of course, the military constituency. We now have medical district hospital units that accept patients from a long way away. We have debated the issue before. How will governing bodies view that constituency? We could see self-interest with guile creeping in to foundation hospital governing bodies. What does my right hon. Friend think about the possible representation of that important constituency under the Bill?

George Young (Conservative, North West Hampshire)

My hon. Friend's right hon. Friend is paid to ask questions rather than to think. The thinking has to come from the Government. My hon. Friend has a military medical service background and he poses very good questions about hospitals that provide a service for our armed forces. He raised the interesting point that if not many people sign up and pay their £1, it might be possible for trusts to be captured by particular organisations—some people have a firm view, for example, on abortion, euthanasia or other forms of treatment. The Health Committee discovered that members would be able to veto decisions taken by the governing body. There is a risk that, if not many people join, control could go to people with firm views who take the time and energy to join and to vote but who may not be wholly representative of their community. There is a later amendment to be tabled by my hon. Friend the Member for West Chelmsford that sets a minimum membership that can be appointed before a foundation trust can be established.

The Health Committee also asked about what happens with an organisation such as Moorfields eye hospital where there is a particular issue concerning representation from the primary care trusts—there might be 50 PCTs represented on the board. That will be the subject of a separate amendment. How does the Minister envisage members joining the foundation that looks after the Moorfields eye hospital? By definition, the constituency will be very dispersed and difficult to communicate with. Although the model may make sense in the context of a popular district general hospital with a well-defined area, it is more difficult to understand the concept when we consider more specialist hospitals that provide services.

It being twenty-five minutes past Eleven o'clock, The Chairman adjourned the Committee without Question put, pursuant to the Standing Order.

Adjourned till this day at half-past Two o'clock.

Standing Committee E

Schedule 1 - Constitution of public benefit corporations

Peter Atkinson (Conservative, Hexham)

With this it will be convenient to discuss the following:

Amendment No. 125, in

schedule 1, page 93, line 12, leave out from 'area' to end of line 13 and insert

'covered by a primary care trust or primary care trusts for which the corporation is the principal provider of hospital based services, or'.

Amendment No. 175, in

schedule 1, page 93, line 15, leave out 'may' and insert 'shall'.

Amendment No. 118, in

schedule 1, page 93, line 17, after 'including', insert

'their family members involved in their attendance and care as patients or other'.

Amendment No. 144, in

schedule 1, page 93, line 17, at end insert—

'(2A) A ''carer'', for the purposes of subparagraph (2), means an individual aged 16 or over who provides or intends to provide substantial care on a regular basis for the patient and does not provide the care in question.

(a) by virtue of a contract of employment or other contract with any person; or

(b) as a volunteer for a voluntary organisation as defined in the National Assistance Act 1948.'.

Amendment No. 119, in

schedule 1, page 93, line 18, leave out 'Subparagraph (1)(a) does' and insert

'Subparagraphs (1)(a) and (2) do'.

George Young (Conservative, North West Hampshire)

I welcome you to the Chair, Mr. Atkinson. You will read in Hansard how a wave of excitement ran through the Committee when we heard the news of your appointment.

Before we adjourned, I was speaking to my amendment on defining the constituency for the purpose of electing a foundation trust. I posed a number of questions not from a troublesome Opposition Back-Bencher, but from the Select Committee, which examined the Bill, the Secretary of State and others and concluded that the Bill is fragmented, confusing and inequitable. The Select Committee made a clear recommendation to resolve some of the issues that I was talking about this morning. It said that

''it is imperative that the Government safeguards democracy throughout the NHS by providing a national set of guidelines specifying the rules for defining membership constituencies and the

process for managing elections so that NHS patients, and the public at large, can have full confidence in transparent and consistent standards of involvement.''

I want to know whether the Minister will be responding positively to the Select Committee's recommendation, which was couched in strong language and referred to safeguarding democracy and so on.

The Government's response so far has been to say that all the issues concerning defining constituencies is a matter for the trusts. However, the Select Committee said in its report that there is no reason why foundation trusts should be experts in community involvement. Fiona Campbell of the Democratic Health Network was quoted in paragraph 41 as saying that

''trusts have no idea of what is involved in real community engagement''.

The Select Committee made the point that they may not have a track record in community and patient engagement so far.

I am worried about all the tasks that we are imposing on foundation trust managements. They are supposed to run a quality service for the NHS, but we discovered this morning that the vehicle that they will have to drive has not been built and is still in the process of being designed. The Under-Secretary can provide no precedent for the corporate vehicle that is envisaged in the Bill. The Government will also have to push back the frontiers of democracy by finding a new way of involving people in running the NHS and inventing new constituencies.

I hope that the Under-Secretary will tell us that on the slender shoulders of the management will not be placed some of the burdens that I have described and that there will be clear guidelines. She may like to invite the Electoral Commission to shed some light on how to get that right. We have not touched on the voting process—how people will vote and so on—and we may come to that later.

I shall draw my comments to a close by saying that there is an important issue here. The Select Committee is not happy with the way in which the Government responded. I and others who have tabled amendments expect the Government to go further and we wait with mounting anticipation to hear how the Under-Secretary will respond to the case that my colleagues and I will make.

Andrew Murrison (Conservative, Westbury)

I rise in support of my right hon. Friend's comments. I alluded to one constituency which needed special consideration and is a good exemplar of the sort of dilemmas that my right hon. Friend touched upon; the military constituency. We must give some thought to unusual groups such as those who use military district general hospital units, MDHUs. A good example is that in Selly Oak. The patient base for Selly Oak is many miles from Selly Oak and Birmingham and may be in Portsmouth or Aldershot. It is difficult to see from the Bill how patients from the military constituency will be represented at such hospitals. I hope that Ministers will focus on that specific example because the matter

is of great concern to me as the Member of Parliament for a fairly military constituency.

I hope that they will also examine the more general point of how to deal with non-straightforward constituencies. I suspect that once we scratch a little further at the conundrum, we will find that many hospitals have an unusual and not dissimilar patient base. We need to ensure that they, too, are properly represented. The example that I gave is quite a good one; for instance, if Selly Oak hospital became a foundation hospital, its governing body would have an interest in excluding that group of patients.

Something of a dialogue is always going on between the military and the NHS in the running of MDHUs. Indeed, I seem to remember that when they were being set up, the NHS had no great appetite for establishing MDHUs within their hospitals. I can foresee foundation hospitals seeking to exclude that particular part of its business, and they would have no incentive to include the military, as the constituency is defined by the hospital. The Health Committee's report on foundation hospitals was right to identity that problem, and it is for the Government to set the parameters when defining what is meant by ''constituency'' rather than leaving it to foundation hospitals.

Steve McCabe (Labour, Birmingham, Hall Green)

I, too, take the opportunity to welcome you to the Chair, Mr. Atkinson.

I have talked to a lot of people about how we should define ''public constituency'', and I have a great deal of sympathy with the amendment tabled by the right hon. Member for North-West Hampshire. The Government's intentions may be good. I have no problem with the idea of decentralising hospitals and with giving them greater scope to innovate, to expand their capacity and to improve the care and treatment of patients; I am all for that. However, I wonder exactly how we can ensure that such public constituencies are genuinely representative.

The right hon. Gentleman alluded to the problems that might arise if particular groups were to attempt to pack the membership. He cited the example of people with radical health perspectives, but that could apply also to religious sects. Indeed, in one of the weekend newspapers, I read how the Socialist Workers party has been able to block reforms in some secondary schools by manipulating the views of certain teachers. I dare say that if Lady Olga Maitland, the erstwhile colleague of Opposition Members, were still alive and kicking, she would be happy to resurrect a militant Mothers Union in pursuit of something similar. [Interruption.] I always remember her being fairly robust.

We need to be clear that the public constituency will be fair in representing people, and that it will not be possible for groups to combine with the deliberate aim of subverting the health service's values and intentions. I hope that the Minister will be able to offer some reassurance, but nothing in the Bill suggests that it will.

The hon. Member for Westbury (Dr. Murrison) was right about the centre for defence medicine. The university trust's initial submission points out that the RCDM air commodore is currently part of the management executive of the trust. It would be a peculiar state of affairs if a military man were to be part of the existing management executive, but that the military had no significant status in the sort of public constituency defined in the Bill. We should be given an answer to that question.

Two other amendments struck me as interesting. Amendment No. 118 seeks to extend the provision to family members. That, too, seems appropriate, but we could end up with the bizarre situation in which the family member who regularly travelled from another part of the country to provide care and attention would be part of the public constituency but, were the amendment to be accepted, someone living a few miles down the road could be excluded. It is important that we cater for family members and those who provide direct care, but the amendment throws up the fact that we need greater clarity on how to define the public constituency and how to ensure that those involved have a say.

I am intrigued by amendment No. 119, which suggests that staff members would need to live in the area. I can see that that might be suggested if we were using a definition used elsewhere—the requirement to reside in a specified area—but it seems absurd to say that the staff should have a stake and an interest in the hospital, and therefore a right to participate, but only those who live within a defined area. That suggests that we do not have clarity on what constitutes a public constituency.

Andrew Lansley (Conservative, South Cambridgeshire)

I have not had the opportunity to explain the purpose and mechanism of amendment No. 119. However, its purpose is not what the hon. Gentleman suggests; rather, it would provide that the carers of patients who also happen to fall within the definition of employees of the corporation—in other words, they are part of the staff constituency—cannot be treated as part of the public constituency.

Steve McCabe (Labour, Birmingham, Hall Green)

I am grateful to the hon. Gentleman. I was referring to amendment No. 118. I apologise if I inadvertently referred to amendment No. 119.

Whichever side one takes with the amendments, they have one thing in common; they highlight the confusion over what is an appropriate public constituency for the venture. The Minister could help allay the concerns of those who fear that this well-intentioned exercise may have unintended consequences. He would go a great way to allaying those fears if he were to give a much clearer description of what will constitute the public constituency, and say how he arrived at those decisions.

Simon Burns (Conservative, West Chelmsford)

I, too, echo what was said in your absence this morning, Mr. Atkinson, about what a pleasure it is to have you and Mr. Griffiths chairing our proceedings for the next 19 sittings.

I wish to speak to amendments Nos. 125 and 144. They dovetail with amendment No. 97, moved by my right hon. Friend the Member for North-West Hampshire. I suspect that they also dovetail with the intentions of my hon. Friend the Member for South Cambridgeshire (Mr. Lansley).

My right hon. and hon. Friends and the hon. Member for Birmingham, Hall Green (Mr. McCabe) highlighted the confusion caused by the vagueness of the Government's proposals for the constituencies of corporations. Eligibility for membership extends to members of the public, people who live in the local area, people who live outside the area but were patients in the previous three years, and employees of the trust. On that last narrow point I have a question for the Minister.

Membership for employees of the trust is confined to those who have permanent contracts or fixed-term contract longer than 12 months. I do not expect the Minister to be able to tell me this afternoon, but what exactly is the position for NHS staff on short-term contracts? In particular, what proportion of NHS staff have contracts of less than 12 months? They will be excluded, but they spend a reasonable amount of time working at the hospital.

Those with short-term contracts of 12 months would be excluded because the provision says that the contract must be for longer than 12 months. What will happen to those who have contracts for 12 months whose contracts are renewed? I presume that when the constituency and its constituent bodies are being drawn up, they would not know that such contracts would be renewed. It would be unfair to disfranchise such people because of uncertainty about how the system works.

Andrew Murrison (Conservative, Westbury)

Has my hon. Friend and, indeed, the Minister considered agency staff? For a variety of reasons—mainly to do with the environment in which we live—they represent an increasingly large proportion of the NHS work force. It would be extraordinary if such an important body of people were to be excluded from the staff constituency. What assessment have Ministers made of that?

Peter Atkinson (Conservative, Hexham)

Order. Before the hon. Member for West Chelmsford (Mr. Burns) continues, we are anticipating the debate on the next group of amendments, which deal with staff contracts rather than the general constituency.

Simon Burns (Conservative, West Chelmsford)

I am grateful to my hon. Friend for raising that matter, but I take on board your valid point, Mr. Atkinson.

The proposals are both vague and confusing. The explanatory notes deal with that at paragraph 48 on page 8. On paragraph 3 of schedule 1, which amendment No. 125 would change, the notes state that

''each public benefit corporation is given the power to specify membership criteria in its constitution. The members must include individuals drawn from the public—the public constituency''.

However, it is up to the benefit corporation to specify the membership criteria in its constitution. I find that slightly worrying because one will probably end up with different corporations specifying different criteria. I hope that Ministers agree that that would

not be satisfactory, because it will cause confusion and anger among those who might be excluded in one area but who would be included in another. We must have consistency throughout the country in order to avoid that sort of problem.

Members do not have different specifications as to who may or may not vote for us in our constituencies. It is an across-the-board national specification that an individual has the right to vote in an election provided he or she meets specific criteria laid down by law. We cannot pick and choose the groups or types of people who can vote. It would be unhealthy and unfortunate if that were to be the case under this arrangement.

Amendment No. 125 proposes a way of tightening up the system in order to give it greater clarity. That would deal not with the employees in the corporation but with the users and the population in the corporation area. I suspect that the Under-Secretary may come up with reasons as to why that would be too restrictive or why it would bring disadvantages that are not obvious to me at the moment. She will undoubtedly enlighten me in due course.

Even if that were to be the Under-Secretary's response, I hope that she would concede the reasoning and the motives behind the amendment, which are to try to achieve greater clarity and consistency. If she feels that that should not be achieved based on the geographical areas of a primary care trust, perhaps it should be achieved using other criteria that are an improvement on the vague position currently on offer.

As my right hon. Friend the Member for North-West Hampshire said, the Health Committee, which produced its report on foundation hospitals last Wednesday before Second Reading, had many reservations about the vagueness of the proposals. I hope that the Minister would consider it an advantage—she may not—that she has no less than three members of the Health Committee serving on this Committee to help her with her deliberations; the hon. Members for Leigh (Andy Burnham), for Lewisham, West (Jim Dowd) and myself.

I urge her to re-read the record of the Health Committee meetings because the Committee made some valid points on this problem. I will not repeat what my right hon. Friend said. However, the Committee is a Select Committee with a Labour majority and is not there to play games and cause trouble. [Interruption.] I note the Under-Secretary's facial expression and the one or two guffaws from Members.

The Health Committee is there to help the Government to improve on these proposals. The Under-Secretary will see in paragraphs 31 to 42 not only the criticisms and the points highlighted by my right hon. Friend, but points made by other people who agree with the concept of democratic accountability and the need to include as many relevant people as possible, but feel that by being so unspecific and giving too many powers to the corporations, the proposals will fall between two stools. In certain areas they will fail to achieve what the Government want and, thus, an inconsistent

system could be allowed to develop. That will cause grievances and create confusion and anger for individuals who may not be included in a constituency in a certain part of the country but who would be included otherwise.

Amendment No. 144 seeks to deal with line 17 of schedule 1, because the Government's proposals are vague. I see what they mean, but in order that legislation is good, it is not enough to simply see what the Government mean. Legislation must be absolutely spot-on, with watertight drafting; or, once it is too late and it becomes law, there is the propensity for problems, confusion and misinterpretation.

Paragraph 3(2) to the schedule states:

''The constitution may also provide for the public constituency to comprise individuals who have attended any of the corporation's hospitals as patients''.

However, as we know from the explanatory notes and the guide published in December, that provision is restricted to patients in the past three years. Can the Minister clarify whether ''the past three years'' start when the patient first goes to see a consultant to be considered for treatment or when the patient has completed his or her full course of treatment?

Paragraph 3(2) continues:

''(including individuals attending as the carer of a patient).''

That is an eminently reasonable inclusion in the Bill. I am relieved that the Government have decided not only to do that, but to include it in the Bill, so that everyone knows that that is their intention. However, the drafting is not precise enough for us to know exactly what the Minister means by the word ''carer''. Is it a good neighbour who pops in to see someone who is ill, makes him or her a cup of tea and does some shopping or cleans the house on a purely voluntary, good-neighbourly basis? Is it someone who is a fully paid, full-time carer for an individual? Is it a family member who cares for his or her partner, mother, father or child? Does it apply to people who look after children? Does it mean that those who classify themselves as carers—even if others consider them to be merely good neighbours—would qualify? If there is a dispute over whether a corporation believes that someone is a carer, as specified in paragraph 3(2), is there some form of appeal to resolve who is right and who is wrong?

To minimise the potential for disputes and disagreements, we are seeking, through amendment No. 144, to include a definition of ''carers'' in the Bill. It is a difficult and, some people might argue, unwise thing to do, because different people have different views of the role of a carer.

We have tried to get a definition that is acceptable to as many people as possible and we have that definition from Carers UK. That, I believe, is one of the best ways of trying to find a legal definition of a carer, if one is needed, to incorporate into legislation. Is it really our intention that those people should have the opportunity to become part of the public constituency? Would not that be the effect of the amendment?

Andrew Lansley (Conservative, South Cambridgeshire)

I hope that my hon. Friend will forgive me for not having asked this question separately. I am slightly perplexed as to why, in this context, Carers UK has included the reference to volunteers for a voluntary organisation as being, in effect, excluded from the definition of carers by virtue of the legislation. Why did it go down that path?

Simon Burns (Conservative, West Chelmsford)

I am slightly perplexed by my hon. Friend's question.

John Hutton (Labour, Barrow and Furness)

It is a good one.

Simon Burns (Conservative, West Chelmsford)

I thought that the Minister might say that, and no doubt he will brief his colleague, who will to reply to this debate.

Steve Pound (Labour, Ealing North)

I am anxious not to interrupt the mellifluous flow of the hon. Gentleman, but I am somewhat concerned. The word ''carer'' is specifically, exactly and precisely defined in the context either of welfare benefits legislation or the law in relation to a person's legal status to another person; whether they are the responsible adult, et cetera. We have a precise definition of the word ''carer''. The proposal contains vague expressions such as

''substantial care on a regular basis''.

Those words strike me as being open to massive degrees of interpretation. I normally have great respect for the hon. Member for West Chelmsford, but on this occasion he is straining at a gnat. Why does he not accept that by moving the amendment he is in fact confusing the situation, when a precise legal definition, accepted by all, already exists?

Simon Burns (Conservative, West Chelmsford)

I do not agree with the main thrust of the intervention by the hon. Member for Ealing, North, because in amendment No. 144 we have gone to the best legal definition of a carer that we can get; that which has been supplied by Carers UK. My hon. Friend the Member for South Cambridgeshire is correct in saying that it would exclude a volunteer for a voluntary organisation, because that is aimed at individuals such as those who help with meals on wheels, who provide meals to a range of people during the day, and who would not be considered under existing legal definitions as carers in the context of what the Government are seeking to do in this paragraph. That is the explanation for paragraph 2(a) and (b).

I hope that the Government will consider these two amendments, as well as amendment No. 97, with sympathy. I hope that the Under-Secretary will agree that despite what are undoubtedly the best intentions of the Government on the issue, they are leaving themselves and the legislation open to wide misinterpretation and confusion as to what they actually intend. When it comes to democratic processes—as in the democratic process for electing hon. Members to the House—the Government cannot afford to be generous and to leave too much to the interpretation of others where it may lead to a system that is not consistent throughout the country and that

is not seen by individuals in certain parts of the country to be fair and equitable.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

I endorse the comments made by others in welcoming you to the Chair, Mr. Atkinson. I want to contribute to the debate from a slightly different perspective, which is drawn from several years of employment experience in the co-operative movement, dealing with a huge range of co-operative societies. Some of those societies were big and others were very small, but they all had different rules of membership and so forth.

First, there is a philosophical contradiction in a mutual or co-operative organisation if the centre tries to prescribe the exact requirements of membership. The essence of a mutual or co-operative organisation is that it has a local membership, and local people should construct the membership qualification, which suits the specific area and the organisation's specific functions.

I am the first to agree that there is always a danger that a group of people in the organisation could use the rules or membership structure to reinforce their position and exclude those from elsewhere. Obviously, mechanisms must be built into the legislation to prevent that from happening, and I assume that the independent regulator's assessment of the constitutions would aim to do that.

We have had a debate on the definition of the word ''carer'', and that debate indicated the complex and difficult waters one swims in if one tries to legislate too closely for the membership of locally based and locally run organisations.

Simon Burns (Conservative, West Chelmsford)

I wish to point out—I suspect that the hon. Member for Ealing, North (Mr. Pound) will be fascinated to hear this, given his criticism of some the words in our definition, such as ''substantial''—that this definition, which was supplied by Carers UK, is the same definition that his Government use to define carers in legislation.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

The whole point of my comments is that I do not want to get into a debate about such things; I do not feel that that is appropriate today. We have a rule, which is defined locally, that is inclusive and meets the needs of local people. That is why I caution against adopting a too prescriptive approach to the definition of membership, constituency, et cetera. In my experience of the co-operative movement, there is a wide range of membership qualifications, some of which are confined to people who are trading and some of which are confined to people who live locally.

For example, the Leeds Co-operative society has one category for the local election of directors and another category for the national membership base. Different models might suit different foundation trusts and areas, according to the geography, the social composition of the area or even the employee composition, which has been mentioned, so I caution against trying to be over-prescriptive. We must have a regulatory regime that is inclusive and relevant to the needs of the trust, regardless of the constituency or membership qualification. That is a better way to deal with the issue than by over-prescription from the centre.

Chris Grayling (Conservative, Epsom and Ewell)

Will the hon. Gentleman give way?

Adrian Bailey (Labour/Co-operative, West Bromwich West)

I have finished.

Patsy Calton (Liberal Democrat, Cheadle)

On behalf of the Liberal Democrats, I, too, welcome you to the Chair, Mr. Atkinson.

The aim of putting the constituency together is to ensure that we deliver a locally accountable, decentralised public service. The question is whether all the concerns have been dealt with by all the various bodies that commented on this matter and whether a locally accountable service will be delivered. The public service will undoubtedly be decentralised, but the composition of the constituency may well determine whether we ultimately end up with a locally accountable body.

The Local Government Association has expressed concerns about many things, particularly the governance of the new arrangements. It is especially concerned about the setting up of a system that is parallel with local government, because there will be a duplication of the role of local councillors and, by extension, of the constituency that elects local councillors. Therefore, we will have different constituencies in the same area.

Those parallel mandates may cause a fragmentation of the public sector that would lead further to the sort of silo mentality in local government, from which we have been seeking to get away. Health, particularly hospital-provided health care, would be treated as something that is completely different from other sorts of public provisions, such as social care and so on, despite our attempts to bring health and social care together and to produce common features and partnership between the different providers.

I will not talk about the staff constituency; the amendments, except the final one, do not cover that. However, I should like to look at and comment on the amendments one by one.

I completely sympathise with the concern of the right hon. Member for North-West Hampshire that there should be some definition of what the public constituency should be. Leaving ourselves without some clear guidance for the foundation trusts will lead to a situation in which it is perfectly possible that although one foundation trust may get it very right indeed, another may fall between all the stools and get it very wrong indeed.

I have some concerns about—although some sympathy with—amendment No. 125, which states that the constituency should be defined as the geographical area served by a PCT. However, the Health Committee's report indicates that at least one—the Moorfields eye hospital—has 50 PCTs. Of those, no single PCT is responsible for more than 2 per cent. of Moorfields' income. There is a problem, which is not insurmountable, that clearly must be addressed. The tertiary sector is a special case.

In Stockport, the local authority, the PCT and what would be the foundation hospital—if Stepping Hill hospital achieved foundation hospital status—would be coterminous. Therefore it would be simple to define

the PCT as being the main one of the three. There are issues, and further exploration is required.

Simon Burns (Conservative, West Chelmsford)

I listened carefully to what the hon. Lady said. She referred to her local hospital, which was seeking foundation trust status. Given how she voted last week, will she be kind enough to tell the Committee whether she supports that application?

Patsy Calton (Liberal Democrat, Cheadle)

I am happy to say that in the round I support it. [Interruption.] I am happy to explain why I am willing to support it. I was on a governing body a few years ago when specialist schools were introduced. I remember being the only member of that governing body who argued at the time that although none of us was in sympathy with the specialist school status, nevertheless, when it was the only show in town and the only way to get what one wanted, it may well be what one should support. More recently, when the school realised that it was not going to get some of the additional funds that it required, in spite of its antipathy towards the idea of a specialist school status, it nevertheless went for it with the wholehearted support of the governing body.

We can all modify our opinions according to local circumstances. I am sure that the hon. Member for West Chelmsford will be happy to explain why he is not prepared to ensure a way forward that will obtain new hospital facilities for his constituents. I am also sure that he will be happy to explain why his fundamental opposition to the principle meant that his party was not prepared to vote for a measure that would improve the lot of his constituents.

Peter Atkinson (Conservative, Hexham)

Order. I am happy for the hon. Lady to explain her position on that matter, but we should not have a full-scale debate on it. I should like her to return to the amendment.

Patsy Calton (Liberal Democrat, Cheadle)

Thank you, Mr. Atkinson. I was giving as full an answer as I thought the question deserved. I see no inconsistency in my position; my constituents always come first.

Simon Burns (Conservative, West Chelmsford)

On the one hand; on the other—

Patsy Calton (Liberal Democrat, Cheadle)

On the other hand—[Interruption.] I am answering the hon. Gentleman's sedentary comments. In our area, the public like—

Peter Atkinson (Conservative, Hexham)

I ask the hon. Lady to return to the amendment.

Patsy Calton (Liberal Democrat, Cheadle)

I am happy to do so if the hon. Gentleman will confine his remarks to when he is in an upright position. [Laughter.]

Amendments Nos. 175, 118 and 144 all attempt to deal with the same issue, which is that users of the facility should be permitted to be members of the constituency. That seems entirely right, although some people might take issue with aspects of it. However, I agree with amendment No. 175, which was tabled by the Liberal Democrats, that patients and carers ''shall'' be eligible. It could not be right for patients and carers to be ineligible, which is what the word ''may'' implies.

It is also right that family members who are significant carers should be involved, and it is right to limit the definition of a carer, in that those who are not paid or who are not from recognised voluntary organisations should not be counted as carers in this sense. I will reserve judgement on whether staff who are eligible for the staff constituency should not also be qualified as both geographical members of the area, either patient-qualified or carer-qualified. It is a great pity that someone should be prevented from acting in a certain way. They may be patients, they may be carers, and I think it is possible for someone—[Interruption.]

Andrew Lansley (Conservative, South Cambridgeshire)

I am slightly surprised by the hon. Lady's argument, which seems to be inconsistent with the support of her hon. Friend the Member for Oxford, West and Abingdon (Dr. Harris) for amendment No. 119; an amendment for which she also expressed support. Does she not recognise that it is important that the legislation defines the boundary between the public constituency and the staff constituency? That is particularly important, as one of the most important consequences to flow from the definition of the public constituency is that someone in it could be elected as a non-executive director of the board. It would be an undesirable step for a member of the staff of the corporation to be elected as a non-executive director of the board also.

Patsy Calton (Liberal Democrat, Cheadle)

The hon. Member for South Cambridgeshire and I must agree to differ on the matter. I have seen and understood the argument before, particularly as it relates to governing bodies of schools, and I do not see why being qualified in one respect should prevent one from being a member in another respect.

A series of issues need to be addressed. The Health Committee and several respected bodies and organisations have made it clear that they are not happy about the lack of definition of the word ''constituency''. We are not happy that all of the people who should be capable of representing others will be able to do so. We are concerned that such people will not necessarily end up as members of the constituency under the Bill. It should be a reflective body.

Andrew Lansley (Conservative, South Cambridgeshire)

When you have a chance, Mr. Atkinson, to read the report of this morning's proceedings, you will observe that I expressed my pleasure in serving under your chairmanship. Further to that, I shall try not to strain your patience, as you have had to listen to me for an inordinate length of time already in this parliamentary Session. I shall also try not to make the same speeches that I made on the Communications Bill.

Even at this late stage in the debate I shall speak to amendments Nos. 118 and 119, which stand in my name, and to amendment No. 175—notwithstanding the speech by the hon. Member for Cheadle (Mrs. Calton)—which stands in the name of the hon. Member for Oxford, West and Abingdon.

Although they are rather more at the detailed end of the debate, I will speak about the purpose of amendments Nos. 118 and 119. Both relate to

paragraph 3(2) to schedule 1, in which we are providing for the public constituency to be extended beyond those who live in a given geographical area. Amendment No. 118 is designed so that the text would read:

''The constitution may also provide for the public constituency to comprise individuals who have attended any of the corporations hospitals as patients (including their family members involved in their attendance and care as patients, or other individuals attending as the carer of the patient).''

You will observe, Mr. Atkinson, that amendment No. 118 is not intended to exclude anybody from becoming a member of the public constituency. I tabled the amendment in order to express a concern that if the definition of ''carer'' was anything other than on the most inclusive basis—my hon. Friend the Member for West Chelmsford illustrated the nature of the problem—it may have the effect of excluding families of patients at the relevant hospital from the public constituency. That is why the words ''care'' and ''attendance'' in the amendment are used in relation to the patient. The objective, as expressed in the guide, and as understood by foundation trusts, is to seek to encourage the widest possible participation by those who have a relationship with the hospital.

Steve McCabe (Labour, Birmingham, Hall Green)

I may have misunderstood this point and I would appreciate clarification. I sympathise with the hon. Gentleman's intentions, but I can envisage a circumstance in which a person is seriously ill in hospital and all 10 family members travel over from the Republic of Ireland to provide 24-hour care and support. Is it really our intention that those people should have the opportunity to become part of the public constituency? Would that not be the effect of the amendment?

Andrew Lansley (Conservative, South Cambridgeshire)

The effect of the amendment certainly would not be to exclude people who actively attended and cared for family members at a hospital.

Where does the proposal come from? It comes from the consideration of circumstances at Papworth Hospital NHS trust in my constituency. The definition of a public constituency in relation to a special trust is likely to be especially important because the geographical constituency will not necessarily be large and will, indeed, probably be relatively small. Let me give an example.

Papworth is a cardiothoracic hospital, so someone who is admitted may not previously have exhibited symptoms. In effect, their care begins the day they are admitted with a heart attack or something of that nature, so their care takes place in the hospital. It would not automatically follow from that that their family members could be defined as their carers, because the hospital would be providing the care. However, their family members would be in attendance and would have a substantive relationship with the hospital. In practice, in the case of Papworth, it will be people such as members of the Zipper club—patients, or family members and friends of patients—who will be looking to be part of the public constituency. They regard themselves as having a close relationship with the hospital.

It is not the job of a foundation trust to write legislation, and no one in hospitals sees that as their

role. However, they do see their role—they would express this pretty straightforwardly—as ensuring that patients' families are an integral part of their care and follow-up care at the hospital and of the hospital community. Hospitals see themselves as treating the whole person, which includes the patient's family. All that I seek to do in amendment No. 118 is to ensure that the term ''carer'' is not be construed in a way that might exclude the family members of those who have been patients.

As we heard, amendment No. 119 is a little more complicated. Paragraph 3(3) is designed to provide that those who live in an area cannot be treated as part of the public constituency if they are also members of the staff constituency. It makes life easier when one can draw on circumstances in one's own parliamentary constituency, and more than 5,000 people work at Addenbrooke's hospital in my constituency. Many would be regarded as living within the geographical parameters of the public constituency, and it is not inconceivable that they would seek to become members of the public constituency if they could do so. They would then represent a substantial proportion of the corporation's voting membership in that constituency. That could significantly distort the intended relationship between the public and staff constituencies.

In that respect, paragraph 3(3) is fine, and I have no problem with it as it stands. I freely acknowledge that amendment No. 119 poses a second-order question in seeking to establish who is the carer of a patient. It is entirely possible that the carer is a member of the staff at Addenbrooke's; indeed, there may well be persons who define themselves as a patient's carer. It is important that such people are not swept up into the public constituency, and the amendment would prevent that from happening. That would close off the two most important ways in which members of staff might become members of the public constituency.

Of course, it would also mean—this is an unarguable and desirable proposition—that members of staff who were also patients at the hospital could not become part of the public constituency. I shall not rehearse my reasons at length, but I tabled the amendment because, unlike the hon. Member for Cheadle, I do not think that it is proper for it to be possible for members of staff to become non-executive directors of the foundation trust by virtue of their becoming members of the public constituency. That is the structure of the argument for the amendment; there is not much more to be said about it in that respect beyond an explanation of its purpose.

Evan Harris (Liberal Democrat, Oxford West and Abingdon)

I signed the amendment and I want to make it clear why I did so. The hon. Gentleman is right that one can do one thing or the other. Someone who is eligible for membership of the staff should either be precluded from being a member of the public constituency by virtue of their being a patient or a carer, or they should not be. The Bill is wholly inadequate in that respect, because it leaves the question open in some case but not in others. That is why I wanted to support the hon. Gentleman in probing the Government.

Andrew Lansley (Conservative, South Cambridgeshire)

I am grateful to the hon. Gentleman for his support for the amendment and I shall not cavil at it.

I shall not dwell at length on other amendments, except to say that I have every sympathy for my right hon. Friend the Member for North-West Hampshire, because the purpose of the constitution should be to define ''public constituency'' for the relevant purposes. I am loth to go too far, and in that respect I rather hope that my hon. Friend the Member for West Chelmsford will not press amendment No. 125, because I would have difficulties with it for two reasons. In the context of—[Interruption.] The hon. Member for Ealing, North talks about splits. He is a fine one to talk after his vote at Second Reading, but there we go.

Simon Burns (Conservative, West Chelmsford)

The rebel amendment.

Andrew Lansley (Conservative, South Cambridgeshire)

I am promptly reminded by my hon. Friend of the amendment at Second Reading.

In the context of an NHS trust such as Papworth, amendment No. 125 does not work. Papworth hospital is not the principal provider of hospital-based services for any primary care trust. However, there are other, subsidiary reasons. For example, the Addenbrooke's hospital would be the principal provider of hospital-based services in Newmarket, outside my constituency, despite the presence of West Suffolk hospital. We shall come on to discuss further aspects of that. I hope that the Committee will become thoroughly familiar with the geography of South Cambridgeshire and neighbouring counties before we are done.

On that basis, I hope that my hon. Friend the Member for West Chelmsford will not press amendment No. 125. However, I support and agree with amendment No. 97, the lead amendment tabled by my right hon. Friend the Member for North-West Hampshire.

Chris Grayling (Conservative, Epsom and Ewell)

Does my hon. Friend not think that hospitals such as Papworth are served by the following subsections, which allow patients and carers to become part of the constituency, while reflecting the fact that, for the majority of hospitals, it is desirable to define a broad geographic area from which patients can be drawn? Does not the Bill, with the amendment from my right hon. Friend the Member for North-West Hampshire, cover both eventualities?

Andrew Lansley (Conservative, South Cambridgeshire)

As usual, my hon. Friend asks a good question. I think that the answer is no. I would expect Papworth hospital NHS Trust's public constituency to consist primarily of patients, former patients, families, carers and so on, but the amendment would exclude virtually any geographical component as such, because no primary care trust would fit the category. However, the people who live around Papworth hospital regard their relationship with it as greatly important. That is not just because they work there; indeed, not that many people in Papworth Everard work at the hospital.

At some point in the next few years—it might be in the next year or two—there may be a proposal for

Papworth hospital to be rebuilt and moved to the Addenbrooke's site. That would be a major shift in the configuration of services. The people who live around Papworth hospital might reasonably think that a measure designed to increase local influence over the configuration of services should give them a voice in the question of what happens to their hospital, which has been an integral part of the community ever since Papworth was established as a TB colony. I do not want to exclude the geographical basis of representation for special trusts and tertiary hospitals, as well as for general hospitals. As with the case of Addenbrooke's, it is important to get the balance between geographical representation and patient representation right. As the Select Committee observed, half of the applications are for hospitals that combine tertiary referral services with district general hospital services. We should not conclude that one or other ought to predominate. We must expect that there will be a substantial mix of geographical and patient-related representation in all hospitals.

Andrew Murrison (Conservative, Westbury)

I have been following my hon. Friend's argument carefully. Does he agree that it is important to separate the relationship that people have with real estate from their expectations of receiving services from a hospital? He rightly alludes to the affection with which people regard their local hospital, but the services that they gain from those hospitals are surely more important. In the case of Papworth, the number of people from the immediate area who use its services is probably very small. I appreciate the sentimental attachment that people have to their local hospital. However, the important thing is what that hospital produces, and its customer base.

Andrew Lansley (Conservative, South Cambridgeshire)

My hon. Friend is right; he makes a fair point. Under current NHS arrangements, local people do not have a direct role, except through the oversight and scrutiny committee of the local authority. I believe that NHS foundation trusts should not be simply providers of medical services, in isolation from their relationship with the local community. If that is true for a district general hospital, it must be true for a tertiary hospital, because both organisations draw not only their personnel but their goodwill and support from the same well.

Andrew Murrison (Conservative, Westbury)

There are many employers in my constituency. A Virgin Mobile call centre employs more than 1,000 people; the Bowyers pork pie factory employs something of the same order. People have a legitimate interest in those organisations and sometimes take a very firm view of what goes on there. That does not mean that they should be represented on the boards of those companies. Does he not see a parallel with the case he is describing?

Andrew Lansley (Conservative, South Cambridgeshire)

I see a parallel but, if we go down the route of argument by analogy, we will get into difficult territory. Are we talking about a locally accountable public service, or a company that is engaged in a purely commercial enterprise? Those distinctions make the analogy difficult to draw. What do we mean by local accountability? What are we setting out to do? Are we creating a mutual organisation of consumers

and a mutual organisation of producers, or are we creating something that has distinct and unique characteristics that include direct local control? How relevant is local control to specialist tertiary hospitals that provide services on a regional and supra-regional basis?

My local hospital, Papworth, provides a supra-regional service, but regards itself as being rooted in the community. That may be for very specific reasons. The whole village of Papworth Everard was created as a TB colony. It is a place where relatively large numbers of people with disabilities live; a place where the Varrier-Jones foundation and the Papworth trust provide specialist services to people with disabilities. All those relationships are complicated, and have an historical background. If we were to exclude the possibility that the constituency of a specialist hospital would include people in its local geographical community, I would regard that as misplaced with regard to the Papworth hospital trust.

There are other specialist hospitals; my hon. Friend the Member for Westbury (Dr. Murrison) referred to the Brompton earlier. The Brompton may conclude that there should be no place for a geographical basis of representation. I do not know; it is up to that institution to decide. In my view, the specialist tertiary centre at Papworth does have a geographical basis for representation as well as a wider public constituency.

From my point of view that was quite a useful and interesting digression, but I persist with my reservations about amendment No. 125. I have delayed the Committee longer than I intended, but I hope that Ministers and hon. Members will see merit in amendments Nos. 118 and 119 when we come to the relevant point in the consideration of the Bill.

Hazel Blears (Labour, Salford)

I, too, would like to welcome you to the Chair, Mr. Atkinson. I am delighted to have the opportunity to serve under your chairmanship.

It might be helpful, before dealing with the detail of the amendments to give hon. Members some idea of the process with regard to the various partners working together on governance. Both the hon. Member for South Cambridgeshire and the right hon. Member for North-West Hampshire have raised some important issues and matters of proper concern about trying to get the balance right between consistent guidelines—what constitutions should look like and contain, and the essential minimum elements we want—and drawing on as much local innovation, imagination and creativity as we can. It is not easy to get that balance right.

As well as pushing forward the frontiers of the legal model that we discussed under clause 1, we are genuinely pushing forward the frontiers of democracy by ensuring that, in order to reflect that legal model with the freedoms and flexibilities it contains, we also, as a corollary, have a new model of local accountability and local social ownership of that model. That will thoroughly connect the organisation to the local people that it serves, the people who work there, those who use it and the

taxpayers who pay for it. It is a fairly complex and difficult venture on which we are embarked, but one which is extremely worth while, and I genuinely think that it will result in better, more responsive services for patients and a better standard in the national health service.

The right hon. Member for North-West Hampshire is right that the Health Committee highlighted the issue of seeking to safeguard democracy. Every Government Member would want to ensure that our plans do just that. We do not just want to safeguard democracy, but enhance it through the way in which the national health service is administered and run. Our proposals allow a significant extension of local democracy in the models that we are introducing.

The hon. Member for West Chelmsford expressed his concern about the possibility of different membership criteria in different areas, which might cause concern among the population. Opposition Members have a decision to make about how much they really do support local devolution, decentralisation and diversity, and to what extent they want to hang on to the means of central control and prescription of the way that such organisations should operate. It is a difficult decision to make; we have clearly made our decision that, within the framework set out in schedule 1, we want to give local organisations the maximum freedom and flexibility to come forward with ideas for their constitutions. These will be judged and assessed to ensure that they are rigorous, representative and can deliver the sort of organisation that we want.

Simon Burns (Conservative, West Chelmsford)

I must say to the Under-Secretary in all kindness that that response is a non sequitur. If one takes the example of parliamentary elections, in each constituency, a local decision is taken by local people who go and cast a vote. However, the rules under which they take that local decision—a totally devolved power—are set by central Government to ensure that the decision is fair and properly organised. Exactly the same should apply to this local democracy, so that central Government interfere not in the operation of local democracy, but in the framework that determines who takes part.

Hazel Blears (Labour, Salford)

We are not creating a new set of parliamentary or local government elections. We are trying to set up a series of organisations and institutions throughout the country that will vary quite dramatically in terms of the kind of constituencies and communities that they serve. We are seeking not simply a passive democracy in which somebody simply uses a vote, but a really active democracy in which people want to be part of an organisation. We are trying to create a different kind of organisation. It is not simply a matter of people casting their votes and then going away. We are seeking to retain people's active participation. We have embarked on a different journey. It is not simply a matter of a vote for an organisation of which somebody is then no longer part. The kind of organisation in question is distinct from that.

George Young (Conservative, North West Hampshire)

The Under-Secretary is pushing her luck. She has just developed an argument for maximum local autonomy in the style of administration in the NHS for a body that has not yet been elected. How on earth does she reconcile what she has just said with what her colleagues in another Department have done to local authorities? Local authorities are democratically elected bodies that were denied the opportunity of choosing their management style. They were told that they had to move to Cabinet-style government even though that was not what they wanted. How does she reconcile what her colleagues did with what she is telling us will happen in this instance?

Hazel Blears (Labour, Salford)

I certainly recollect that in my local authority we went through a lengthy period of discussion and consultation about what kind of business model we should have. As I recall, some of the options were put to the public and discussed—in a vote—in thousands of newsletters throughout my community. There was certainly lengthy discussion and consultation on the appropriate form of governance for local authorities.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

Picking up on the issue of voting in local government, does the Under-Secretary agree that it is precisely because of the failure of so many electors to engage in local government that the Government have given local authorities a degree of discretion to change their voting structures in the locality to promote more involvement, precisely in the same vein as we are recommending for hospital trusts?

Hazel Blears (Labour, Salford)

My hon. Friend makes an important point. In my constituency, we virtually doubled the turnout for the local elections. Clearly, the Government are increasingly establishing different forms of organisation. One example is the new deal for communities boards, many of which are achieving a higher level of turnout in their elections than is possible in local government. The whole idea of having a diversity of governance models in local and national Government is rapidly becoming a feature of the Government. They are eager to explore diverse democratic models.

Simon Burns (Conservative, West Chelmsford)

The Under-Secretary has completely lost me. On the example of local government, the hon. Member for West Bromwich, West (Mr. Bailey) mentioned different ways of physically voting, but the issue is changing different constituencies of people who may vote, which is completely different.

Hazel Blears (Labour, Salford)

If the hon. Gentleman had taken notice of the second part of my remarks, he would know that I mentioned the example of the new deal for communities boards. He may not have one of those in his area. If he does not, he is missing out on one of the Government's tremendous regeneration projects. In those areas in which the new deal for communities is operating, people's interest in becoming members of the board, taking part in elections and becoming engaged with boards that are making a real difference in their neighbourhoods shows us the way in which we can re-energise democracy in the delivery of public

services generally, which is what we are trying to do in the NHS.

Adrian Bailey (Labour/Co-operative, West Bromwich West)

I agree with my hon. Friend about the different ways in which people engage with local government. Considerable powers have bee devolved to town committees and more locally embedded structures to ensure that they are closer to the people.

Peter Atkinson (Conservative, Hexham)

Order. Before the Under-Secretary replies, I should say that I thought that we were debating foundation hospitals. Perhaps she will concentrate more on that than on systems of local government.

Hazel Blears (Labour, Salford)

Indeed, Mr. Atkinson, I shall be delighted to do that. Let me reassure hon. Members about our concern to get the balance right. The right hon. Member for North-West Hampshire asked whether there would be national guidelines, templates and materials for trusts to use in drawing up their proposed governance structures under the schedule. A model constitution is being developed as I speak. We hope that it will not be prescriptive or definitive, but that it will contain a great deal of support and guidance for organisations.

We have set up an external reference group—comprising people from organisations such as the co-operative movement, the Electoral Reform Society, the Institute of Directors, the Compass Partnership, various NHS charities and the Alzheimer's Society, plus a couple of academics—to help us to explore with the applicants for foundation trust status what good governance should look like, and what the essential elements of their constitutions should be. That group has already met and is working on a source book that will provide some support for the applicant foundation trusts, with which it will work closely. There is to be an event on 20 May at which prospective applicants will consider governance and draft constitutions. An implementation team will work with the trusts to ensure that they get their governance right. Each organisation that goes forward to the second stage of application, when it will be required to work on a much more detailed constitution, will nominate a governance lead to take the process forward.

Chris Grayling (Conservative, Epsom and Ewell)

Forgive me if I have misunderstood the democratic process, but is not the Committee debating the Bill, which will return to the House and then to another place? Is the Under-Secretary saying that trusts are spending money on applications for foundation status before the House has decided whether to grant hospitals access to foundation status?

Hazel Blears (Labour, Salford)

No announcement has been made as to which trusts will go forward, so none is in the second stage of application, which is when a trust would prepare a detailed constitution. Trusts are not in a position to do that work. I was seeking to reassure hon. Members who had asked important questions about what kind of guidance would be available and what issues the constitutions should address. The schedule sets out a minimal framework, which we expect every constitution to use. People should then make local proposals about the membership, the register, the methodology of electing the board of governors, the size and composition of the boards of

governors and management, the appointment of non-executive directors, the principles of remuneration, the responsibilities of the boards of governors and management and all the matters that will affect the futures of the organisations.

Jon Owen Jones (Labour/Co-operative, Cardiff Central)

Will the Under-Secretary reassure the Committee that, in deciding on the criteria to be used to establish good governance, we shall not lose sight of a fact that the majority of the public would recognise; good governance is that which delivers efficient, reliable and safe service in as fast a process as possible?

Hazel Blears (Labour, Salford)

My hon. Friend makes an important point. The Bill places a duty on the trusts to operate in an effective, economic and proper way in order to provide responsive services to patients. That is what this process is all about. There would be little point in going through it if we did not genuinely believe that connecting those organisations to the local community will drive up standards and ensure that services are available quickly and responsively. The Secretary of State has gone on record as saying that the system must work and that the process must be meaningful for the patients and the public involved.

I should like to reassure Members that all the important issues in the constitution will be taken into account in the process. Chapter 2 of the guide contains a long section on what the governance should look like. It goes through who can be a member, who can be on the board of governors and who can be on the board of directors.

Andrew Lansley (Conservative, South Cambridgeshire)

Perhaps the Under-Secretary can help me with something that my hon. Friend the Member for West Chelmsford was discussing. The guide states that membership is open to

''people who live outside that area but have been patients in the previous 3 years'',

but neither the explanatory notes nor, for that matter, the Bill refer to that qualification.

Hazel Blears (Labour, Salford)

The hon. Gentleman is correct that several matters discussed in the guide have not been translated into the Bill. I will deal with the issue of patient representation and what the trusts choose to bring forward. It is not appropriate to put in the Bill an arbitrary cap on the period for which somebody should have been a patient.

Simon Burns (Conservative, West Chelmsford)

If I understand the Under-Secretary correctly, she says that the three-year rule has not been translated from the guide into the reality of the Bill. Does that mean that if one were treated in a hospital 30 years ago, one would be included?

Hazel Blears (Labour, Salford)

If I may say so, the hon. Gentleman is guilty of hyperbole.

Simon Burns (Conservative, West Chelmsford)

The Minister of State told the hon. Lady to say that.

John Hutton (Labour, Barrow and Furness)

No, I did not.

Hazel Blears (Labour, Salford)

I can think up four syllable words of my own volition.

Simon Burns (Conservative, West Chelmsford)

What is the answer?

Hazel Blears (Labour, Salford)

The answer is that it is for a trust to decide what it wants to put in its constitution to define

the public part of its constituency, which may or may not include patients. The right hon. Member for North-West Hampshire asked whether the definition would include one-off visitors to accident and emergency or out-patients. There may be different circumstances in which different groups of patients are included. The Liberal Democrats tabled an amendment that would have included all patients in all circumstances. There is a debate and it would not be appropriate to put an arbitrary 36-month cap in the Bill.

Steve McCabe (Labour, Birmingham, Hall Green)

I may have missed this in the Bill or in the notes, but is there a mechanism for people who think that the constituency defined by the trusts is wrong or inappropriate? How can people say, ''This is wrong. This does not represent my hospital. The wrong people have been given access to power''? Surely that is what people are concerned about.

Hazel Blears (Labour, Salford)

Indeed, local people will be concerned to ensure that the post-draft constitution reflects their view of what is a representative body for their community. That is why the Bill states that when the second stage application is made, there will be a requirement to consult not only with local people but with the primary care trust and with partner organisations to ensure that there is broad support for the way in which the draft constitution outlines who shall and shall not be a member. There will be a local process to enable that to happen. The Bill also provides for the Secretary of State to make regulations on the nature of the consultation process to ensure that it is robust and vigorous so that people are entitled to have their say about the membership constitution before it is finally endorsed by the Secretary of State and the independent regulator.

Simon Burns (Conservative, West Chelmsford)

All through the Under-Secretary's comments, she has stressed that this is a great devolving power to allow trusts to make decisions. All of a sudden, she has slipped out that the Secretary of State will issue regulations guiding trusts in certain areas. Her argument is a contradiction in terms. On the one hand, she claims that the power will be devolving and that everyone will make their own way and their own decisions; on the other—this is typical of the Government—she says that the Secretary of State will issue regulations to tell trusts how to behave.

Hazel Blears (Labour, Salford)

I believe that the hon. Gentleman would be the first to admit that the regulation-making powers in the Bill are scarce; they are hard to find. It is perfectly proper that there should be regulations about the process of consultation but not regulations that prescribe the content and substance of the proposals. That distinction may be a little too subtle for the hon. Gentleman, but I commend it to him, because I genuinely believe that it is about getting the balance of democracy right.

The process ought to be one in which people have a proper opportunity to influence whether the proposals proceed to the next stage and whether they are founded on principles that gain a wide measure of respect in the community. It is not for the Secretary of State to prescribe the detailed content of the proposals,

which properly ought to be left to local consideration. That is an important distinction, although, as I said, perhaps it is too subtle for the hon. Gentleman.

I also commend to hon. Members section 7 of the guide, which sets out the application process and the support that will be offered. Hon. Members have expressed concern about the support that will be available to applicant trusts to enable them to take on the burden of connecting in a democratic fashion with their local communities as well as running the core services of a hospital trust. It is important to keep in mind that this will be a new venture for many NHS foundation trusts.

I am delighted that many trusts are enthusiastic and willing partners in the venture. I look forward tremendously to their having an opportunity to engage local residents and patients in designing the services, but I freely admit that they will need help and support to enable them to do so. That is the purpose of the external reference and implementation groups that will be set up to help on a day-to-day basis. We genuinely want to get to a point at which the democratic element of the proposals is robust and effective in driving standards and the responsiveness of services. We want the process not for its own sake but for a purpose.

The rest of the debate is in Hansard.