National Health Service (Amended Duties and Powers) Bill

Public Bill Committee, 24 February 2015.

Clause 1

Jimmy Hood (Labour, Lanark and Hamilton East)

I remind the Committee that with this we are discussing the following:

Amendment 37, in clause 1, page 1, line 12, at end add

“as far as is compatible with the liberties of the people of England and without any additional regulatory burden.”

Amendment 40, in clause 1, page 1, line 15, at end add—

“(c) nothing in this section shall be interpreted as entitling or requiring the Secretary of State to direct people in their personal conduct, nor provide unsolicited advice on diet or behaviour, nor to spend public funds on propaganda, nor to discriminate against specific foodstuffs, nor detrimentally to affect any lawful industry;”

Amendment 1, in clause 1, page 2, leave out lines 1 to 8

Amendment 41, in clause 1, page 2, line 2, leave out “general economic interest” and insert

“that ensures value for money”

Amendment 78, in clause 1, page 2, line 2, after “interest”, insert

“pursuant to one or more universal service obligations”.

Amendment 39, in clause 1, page 2, line 3, leave out “social solidarity” and insert “medical necessity”

Amendment 79, in clause 1, page 2, line 3, leave out “solidarity” and insert “cohesion”.

Amendment 80, in clause 1, page 2, line 3, leave out “social solidarity” and insert “the public benefit”.

Amendment 42, in clause 1, page 2, line 8, at end add

“subject to consultation with relevant local government bodies”

Amendment 49, in clause 1, page 2, line 13, at end add

“or is a charge made to a person who is not entitled to free care by virtue of his immigration status.”

Amendment 50, in clause 2, page 2, line 16, leave out “social solidarity” and insert “medical necessity”

Amendment 81, in clause 2, page 2, line 16, leave out “solidarity” and insert “cohesion”.

Amendment 83, in clause 2, page 2, line 16, leave out “social solidarity” and insert “the public benefit”.

Amendment 51, in clause 2, page 2, line 18, leave out “mutual cooperation”

Amendment 52, in clause 2, page 2, line 19, leave out “social solidarity” and insert “medical necessity”

Amendment 82, in clause 2, page 2, line 19, leave out “solidarity” and insert “cohesion”.

Amendment 84, in clause 2, page 2, line 19, leave out “social solidarity” and insert “the public benefit”.

James Arbuthnot (Conservative, North East Hampshire)

It is a great pleasure to see you back here, Mr Hood, and to be back here ourselves.

My right hon. and hon. Friends know far more about the subject we are talking about than I do, and I hope they will put me right if I go wrong. My hon. Friend the Minister sat on the 2012 Health and Social Care Bill Committee. My right hon. Friend the Member for Chelmsford piloted that Bill through the House. Similar things could be said of Opposition Members. You, Mr Hood, chaired that Committee. Therefore, you all know considerably more about this than I do, so I hope someone will set me straight if I go wrong.

I have not had the opportunity to congratulate the hon. Member for Eltham on his success on getting the Bill into Committee. My hon. Friend the Member for North East Somerset said that the hon. Gentleman was a pretty good egg, and I think we would all rather agree—we would need to have Division about that. In my 28 years in the House, I have never had the good fortune to have a private Member’s Bill, so his achievement after a mere 18 years is a real one.

During my political life, I have often been asked what subject I would choose if I could have a private Member’s Bill. In the early stages of my parliamentary career, I used to say worthy things such as, “I would introduce a Bill to improve the national health service.” More recently, as I have grown in cynicism, I have said, “I’d like to introduce a Bill to abolish private Members’ Bills.” Every year, therefore, I have put my name in the ballot for private Members’ Bills, dreading the thought that, one of these days, it might come out. Luckily, it never has. Now, of course, it never will.

In answer to the unspoken question from the hon. Member for Eltham, I was not present for the Second Reading of his Bill. The task of those who were was, essentially, to ensure that enough Members were present for the Bill to get a Second Reading; in other words, there had to be at least 100 for a closure motion. The Labour Members present also wanted to show that the Labour party believes in the national health service, which, of course, it does. I, too, believe in the NHS, as do all my right hon. and hon. Friends. However, I must tell the hon. Gentleman that I do not support his Bill, which is why I was in my constituency on that Friday.

Clause 1 and the amendments—including mine—highlight the hon. Gentleman’s dilemma. He had to decide between a Bill that did not say very much but was likely to get on to the statute book, and one that was massively ambitious and doomed to fail, but which might, in its failure, make a great statement. In its own way, clause 1 makes a great statement. It states that the Secretary of State must promote a

“comprehensive health service based on social solidarity”,

which sounds like motherhood and apple pie. I approve of all four of those things: a comprehensive health service, social solidarity, motherhood and apple pie.

David Nuttall (Conservative, Bury North)

My right hon. Friend just said that he approves of social solidarity, but will he explain, for my benefit and that of others, what he understands by that term? Perhaps he will come on to it later in his speech.

James Arbuthnot (Conservative, North East Hampshire)

I hope that, by the end of my few short remarks, I will have helped my hon. Friend to some sort of understanding of what I mean by the term. What I mean by it, of course, may be entirely different from what other Committee members mean by it. I am fortified by a book on the subject called “The Division of Labour in Society”, written by a gentleman called Émile Durkheim, which I will come on to later if I am so fortunate.

Before I come to my amendments to what may turn out to be a key part of the Bill, I will deal with the other amendments, in particular those tabled by my hon. Friend the Member for North East Somerset. So far, we have not had the benefit of hearing from any other of my right hon. and hon. Friends, but I hope that we will have that opportunity during these debates. I shall not deal in quite as much detail as my hon. Friend might wish with his amendment that seeks to replace “social solidarity” with “medical necessity”. I hope that what I say about my amendments, which would replace “social solidarity” with the concepts of cohesion, public benefit and universal service obligations, will cover social solidarity.

I will deal briefly with the concept of medical necessity, which is an important part of my hon. Friend’s amendment. What is a necessity is a matter of balance and degree. The problem with the word “necessity” is that it implies an absolute; it admits of no compromise. It is true, as my hon. Friend suggested, that what is necessary changes over time, so to that extent it is not absolute. One must not compare these important issues with what one’s children mean when they say, “I need a McDonald’s”, or, “I need a Krispy Kreme doughnut”. One must therefore question what “need” or “necessity” actually mean.

Greg Knight (Conservative, East Yorkshire)

My right hon. Friend is on to a great point. Is not the problem with amendment 38 that the phrase “medical necessity” is far too severe? Would not “medical amelioration” be better?

James Arbuthnot (Conservative, North East Hampshire)

I am impressed that my right hon. Friend was able to say the word. Whether the phrase would be better is a matter that he might like to consider, if we have time, by tabling an amendment to that effect. That is an important idea that we probably need to pursue. There is the question of what “necessity” means. A clear distinction needs to be drawn between what is nice to have and a necessity.

Greg Knight (Conservative, East Yorkshire)

It seems to me that if a female has varicose veins, an operation to remove them is not a medical necessity. However, it is desirable and, in my view, something that ought to be available on the NHS, although it is not necessarily a medical necessity.

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend is on to an absolutely important point. My right hon. Friend the Member for Chelmsford may have mentioned tattooes previously.

Simon Burns (Conservative, Chelmsford)

I hope my right hon. Friend understands that the NHS should provide care for patients based on medical need and necessity. Of course, in this country, the NHS does not provide for the removal of tattooes or varicose veins unless there is a genuine medical need.

James Arbuthnot (Conservative, North East Hampshire)

Oh dear. My right hon. Friend has sort of amended the amendment of my hon. Friend the Member for North East Somerset by adding the phrase “need and necessity”. We are beginning to get into a difficult area of language. Where does need stop? In the end, it has to come down to a doctor’s judgment.

Simon Burns (Conservative, Chelmsford)

My right hon. Friend is absolutely right. However, that judgment—I hope my right hon. Friend agrees—has to be based on medical need and necessity. For example, tattooes are put on people voluntarily and most people accept that it is unreasonable for the NHS to have to fund their removal if the person comes to dislike them or their girlfriend’s name has changed. Why should the taxpayer pay for that when the money could be devoted to hip replacements, cataracts and other genuine medical needs?

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I remind hon. Members that interventions should be a lot shorter than the one we have just experienced. I hope future interventions are a wee bit shorter.

James Arbuthnot (Conservative, North East Hampshire)

Of course you are right, Mr Hood. My right hon. Friend’s suggestion opens up a huge new area of concern. To what extent is it a necessity to remove tattooes if their removal will prevent or reduce the possibility of psychological damage for someone who, for example, has been stupid enough to have a tattoo on his or her face? That could well give rise to psychological damage. However, that takes us down the route of the extent to which it is necessary for the national health service to pay for a self-inflicted issue, namely the improvement of those who have been irreparably damaged by smoking. I will get on to the depraved habits of my right hon. Friend the Member for Chelmsford in due course.

However, we are in an area where it is extremely difficult to litigate, which is why I will not support amendment 38. I feel almost distraught about that, because my hon. Friend the Member for North East Somerset moved his amendment with such charm and compelling learning, and in a way that was such fun. The trouble was, he was wrong. I reject what he says about medical necessity because, while I think that it is necessary to draw a clear distinction between what is nice to have and what is necessary, in practice it is almost impossible to do that in legislation. However, my hon. Friend then moved on to an important amendment about the liberties of the people of England.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

Before my right hon. Friend moves on from medical necessity—we seem to have gone round the houses on medical necessity and need—the amendment does not mention the involvement of clinicians in deciding where need and necessity lie. I wondered if he might like to comment on what role the clinician might play, before he moves on.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend raises another important point. I have this vision of clinicians being dragged off to clink because they have failed to define appropriately what is or is not necessary. I would be concerned if that were the consequence of amendment 38.

Simon Burns (Conservative, Chelmsford)

The NHS, since the day that it was created, has taken decisions on the care of patients on the advice of clinicians.

James Arbuthnot (Conservative, North East Hampshire)

Indeed. I think that we are arguing strenuously to agree with each other. While the NHS has taken decisions on the basis of the advice of clinicians, at no stage has it done so because of a couple of words in a statute. It has done so because the people of this country and all the political parties of this country believe in the NHS and regard it as one of the icons of society.

Simon Burns (Conservative, Chelmsford)

I do not want to correct my right hon. Friend, but I remind him that one political party, the UK Independence party, has raised the spectre of turning the NHS from free at the point of use and funded by the taxpayer to a possibly insurance-based health service.

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend is right to a degree. Mr Farage did raise that question, but then he discovered that it was such a difficult issue for him to deal with in terms of the electorate that he rapidly backed away from it. We, I think, began to discover what he actually believed and so I hope that, when we come to an election in a few months, people will remember where he really stands on the importance of the NHS and its being free at the point of delivery.

My hon. Friend the Member for North East Somerset raised an important issue about the liberties of the people of England. It was a matter of some concern to me that he proposed liberties for the people of England that might not find their way, because of our devolution laws, to the people of Scotland, Wales and Northern Ireland. That worries me—I hope that it is of concern to the people of Scotland, Wales and Northern Ireland. At the end of the day, it has to be a matter for those countries to deal with under our devolved laws. We have the good fortune of having on this Committee the hon. Member for Dumfries and Galloway, even though he is not in his place at the moment. I hope that, once he pores over our discussions in Hansard, he will be able to take back to Scotland the important point that liberties are essential and suggest that they might like to follow the lead of this Parliament. I am not sure how that will go down, but he can give it a try.

I support the amendment of my hon. Friend the Member for North East Somerset on liberty. I will always listen to my hon. Friend on liberty.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am extremely grateful that my right hon. Friend has given way. I stress the urgency of this, because a gentleman called Tam Fry of the National Obesity Forum told us at the weekend that we Members of Parliament eat too many chocolate bars, chalking up about 200,000 a month among the lot of us. I think it is a jolly good thing and we should eat more chocolate bars. I would like to encourage that and tell Mr Fry, named after a famous chocolate manufacturer, that he should enjoy his heritage more.

James Arbuthnot (Conservative, North East Hampshire)

This is extraordinary. I do not know whether my hon. Friend has been reading my speech, because I am about to come on to the important issue of chocolate. I am delighted to hear what Mr Fry says, and I hope we can pursue this in sufficient detail during our deliberations.

My hon. Friend tabled another amendment relating to whether the NHS should tell us what to eat and, presumably, what sort of lifestyle we should lead. He will be shocked to hear, as I was surprised to discover, that I found myself voting for a ban on smoking in public places. I am sure he is shocked by that—I was astonished—but I voted for such a ban because, the night before, I went to dinner with a hard-smoking friend of mine and she sat puffing smoke in my face throughout the dinner. I thought, “I’m not having this; I’m going to vote for that ban”, and I did. In such ways are bans passed through the laws of this House.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

Did my right hon. Friend not consider asking her to stop smoking? We would not then have needed to ban yet more legal activities.

James Arbuthnot (Conservative, North East Hampshire)

Oh yes, I did, but it had no effect whatever. That is the problem with smoking, as it is with chocolate, which I will come on to. The trouble with those who used to smoke in public places was that they thought they had some sort of God-given right.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am a little puzzled. The dinner seemed to be a private dinner, rather than a public dinner. Perhaps my right hon. Friend will elaborate on the exact circumstances of his dinner.

James Arbuthnot (Conservative, North East Hampshire)

Since my hon. Friend asks, it was a legal dinner after a legal event. As I have already announced to the Committee, my wife is a judge, so I was there as an appendage. I was an effective appendage, because the dinner had a profound effect, I like to think, on the laws of the land in that it meant that I went out there and banned smoking, and I felt so powerful doing it.

Jacob Rees-Mogg (Conservative, North East Somerset)

Just to clarify, had the loyal toast been given, and was it therefore in order to smoke?

James Arbuthnot (Conservative, North East Hampshire)

It was not an event, I am pleased to say, at which there were speeches, apart from my saying, “For God’s sake, stop smoking”, so there was no loyal toast, but perhaps there should have been. Even if there had been a loyal toast, she would have been puffing smoke in my face.

On the depraved habits of my right hon. Friend the Member for Chelmsford, I wonder whether it would be a matter of medical necessity under amendment 38, which I am afraid I have rejected, to stop people smoking. When my right hon. Friend the Member for Chelmsford was a Health Minister—while also being an inveterate smoker—he might have found himself in a bit of a dilemma over that, and over the amendment on whether the NHS should tell us how to live our lives. However, I see that my right hon. Friend the Member for Chelmsford is not going to justify his depraved habit—oh, he is.

Simon Burns (Conservative, Chelmsford)

I will disappoint my right hon. Friend. I am not going to justify my smoking, because I am not proud of it. However, I can reassure him that during both times when I was a Health Minister I had nothing to do with public health policy on smoking, because it could have been construed as hypocritical.

Jimmy Hood (Labour, Lanark and Hamilton East)

Jacob Rees-Mogg.

James Arbuthnot (Conservative, North East Hampshire)

I hope I am not Jacob Rees-Mogg—in fact, I would be delighted to be Jacob Rees-Mogg.

Jacob Rees-Mogg (Conservative, North East Somerset)

I can reveal that our mothers are friends, so at least we have a connection.

James Arbuthnot (Conservative, North East Hampshire)

They are indeed, and one way or another we are probably related.

We are what we eat, and in my view, the NHS has a role to play in nudging us towards eating healthily. I listened with care to my hon. Friend the Member for North East Somerset on the dilemmas that the NHS has to overcome regarding what eating healthily actually means, and here we return to the difficulties of definition. I have a hint for the NHS, which is that healthy eating is to be encouraged, provided that it involves a large amount of chocolate. I said I would get back to Mr Fry’s intervention, and I am delighted to hear that he is so supportive of his family company. Provided that the NHS gets that right, I shall support its right to suggest what we might eat. However, I will wait to hear from my hon. Friend the Minister on the important matters of chocolate, smoking and the nanny state, and then I will decide which way to vote on the amendment that my hon. Friend the Member for North East Somerset tabled.

Jacob Rees-Mogg (Conservative, North East Somerset)

While my right hon. Friend is still on the matter of chocolate, it is important to understand that there have been some recent studies showing that chocolate can have enormous health benefits. Apparently it is very good for removing wrinkles, according to reports in last week’s newspapers.

James Arbuthnot (Conservative, North East Hampshire)

I suppose it depends on how you apply it.

Jacob Rees-Mogg (Conservative, North East Somerset)

Just eat it.

James Arbuthnot (Conservative, North East Hampshire)

I see. If one eats chocolate to remove wrinkles, I ought to be wrinkle-free, but at the moment I am afraid that I am not. Clearly, I am not eating enough chocolate. I do not know whether chocolate is an aphrodisiac, although it may be, but I understand that dark chocolate, provided it has above a certain percentage of cocoa content, is frightfully good for the heart and for slimming. It is therefore the sort of thing that the NHS ought to recommend. I am inclined towards rejecting the amendment of my hon. Friend the Member for North East Somerset, although I feel distraught about this.

I have one or two amendments of my own, and it is time to consider those. At first glance, one must wonder what the clause is for. Amendment 1 would leave out proposed new section 1(2)(b) and (c). I hope that in the course of my short remarks I will be able to persuade the Committee that the amendments are important. Proposed new subsection (2)(b) states that the Secretary of State must, for the purpose of promoting a comprehensive health care service,

“ensure that the health service is a public service which delivers services of general economic interest and operates on the basis of social solidarity”.

Solidarity, as my hon. Friend the Member for North East Somerset said, brings back wonderful memories of the Polish trade union Solidarnosc in Gdansk, founded in 1980.

Solidarnosc is an excellent name for a trade union. It is a grand-sounding concept, full of hope and togetherness and, as we saw in Poland, the movement helped to bring about the end of the corruption that was the Soviet Union, but how does it translate into a legislative requirement? The Committee is considering not only solidarity, but the introduction into our statutes of social solidarity. How is social solidarity to be distinguished from solidarity? What, in legislative terms, does solidarity actually mean?

We have had the religious context from my hon. Friend the Member for North East Somerset. Since he is the only member of the Committee we have heard on the substance of the Bill—I am sure we will have other contexts from other members—we have only the religious context to go on. In view of my announcement in the House on 16 January that I do not believe in God, I know that my hon. Friend will forgive me for not pursuing him down the religious road.

Simon Burns (Conservative, Chelmsford)

Does my right hon. Friend agree that we are somewhat in the dark about the true meaning of this because, sadly, we have not yet heard from the hon. Member for Eltham? The hon. Gentleman was rather reticent in his Second Reading speech in defining exactly what he meant by this almost Stalinist term.

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend is right, of course. I read the speech of the hon. Member for Eltham on Second Reading and thought, frankly, that it was a barnstorming speech, although I was not in the House, for reasons I have explained. However, there was, as my right hon. Friend says, a real lacuna, if one may use such a word, in his speech. At no stage did he go into what he meant by social solidarity. At no stage did he go into what he meant by,

“a public service which delivers services of general economic interest”.

It was a really good speech, during which the hon. Gentleman took several interventions, but it would have been nice to know what he thought he was doing.

Clive Efford (Labour, Eltham)

I merely point out to the right hon. Gentleman that if he was so interested, he could have been there to ask me and I would have tried to elucidate.

James Arbuthnot (Conservative, North East Hampshire)

Yes, I could, but I have to say that at the time, in November, I was not in the least interested in it. It was, I thought, a Bill which was trying to do things on an entirely misguided basis for entirely the wrong reasons and I thought my time would be better spent in my constituency as, indeed, it turned out to be. However, I hope that in the course of these debates the hon. Gentleman will have the opportunity to tell us what he means in his legislation, because when we are passing words into law we should all agree that they need to mean something.

I was saying that I am not going to pursue my hon. Friend the Member for North East Somerset down the religious road. I am sorry my hon. Friend spoke so briefly about the subject. If he had devoted a little more time to it he might have tempted me back into the ways of the Church, even into the ways of his Church.

Jacob Rees-Mogg (Conservative, North East Somerset)

Fortunately, as this is the Committee stage, I might be able to fill in any gaps later.

James Arbuthnot (Conservative, North East Hampshire)

I look forward to that with enormous anticipation. Perhaps we will have a Damascene moment in Committee. If I am not going to go look at social solidarity in a religious sense, I shall need to do so in a sociological one.

Sociology is a genuine discipline, which has been unfairly maligned over too many decades. I asked my hon. Friend the Member for North East Somerset if he would tell the Committee when the term “social solidarity” was first used. With his usual charm and courtesy he invited me to do so myself. I shall attempt to do so, but I know that many hon. and right hon. Members of the Committee will know far more about it than I do, including you, Mr Hood. As I said at the beginning, if I do go wrong, someone will set me straight.

Sir Greg Knight rose—

James Arbuthnot (Conservative, North East Hampshire)

I will give way to my right hon. Friend, who is about to set me straight already.

Greg Knight (Conservative, East Yorkshire)

I would not say that. I am puzzled by why my right hon. Friend wants to delete that provision in toto. Surely, he cannot object to the first part, which says the Secretary of State should ensure that the health service is a public service.

James Arbuthnot (Conservative, North East Hampshire)

I do not object to the first part. I will come on to the issue of whether it is a public service and whether there is a need for legislation to provide that it should be a public service. I am not sure that I will convince my right hon. Friend, but I hope to be able to persuade him that the health service is a public service. As I said earlier, virtually all parties in this country believe that it is a public service that needs to be free at the point of demand, and that it should continue to be so.

Jacob Rees-Mogg (Conservative, North East Somerset)

I was pleased, indeed honoured, to be able to put my name to my right hon. Friend’s amendment, because I think those first few words are essentially covered by other parts of the Bill and are therefore otiose in the provision he seeks to remove.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is on to a good point. I have not examined the remainder of the Bill in the context of this amendment with quite the assiduity that perhaps I should have. I hope I can put that right later.

Simon Burns (Conservative, Chelmsford)

My right hon. Friend says he is not familiar with the origins of the term “social solidarity”. I wonder whether he is teasing the Committee, because he is of course familiar with the works of Émile Durkheim. I suspect he has read the tome on his desk and will enlighten us more in the course of his comments.

James Arbuthnot (Conservative, North East Hampshire)

I am not entirely sure that I did say that I was not familiar with the term “social solidarity”. If I did, I was wrong because over the course of my last ever parliamentary recess—it was strange to come back from that—I have become all too familiar with the concept of social solidarity. I hope that I will be able to enlighten the Committee on the meaning of social solidarity. My right hon. Friend the Member for Chelmsford is right. This is an interesting book called “The Division of Labour in Society” by Émile Durkheim. There is a dispute about whether it was published in 1892 or 1893. Originally it was called the “L’Étude sur l’organisation des sociétés supérieures”—“The study of the organisation of superior societies”. Somehow it has been translated as “The Division of Labour in Society”, which I think is a rather poor translation.

By all accounts, Mr Durkheim was a pretty wonderful chap. He was the first French professor of sociology at the Sorbonne. Some have described him as the father of sociology, not just in France but in the world. In this book, he investigates the important question of how society holds itself together despite everyone having different interests. He put forward the idea that social order was maintained in societies by two different forms of solidarity described as mechanical and organic—he described them in French, but I will not trouble the Committee with that—through the transition from more primitive societies to advanced, industrial societies.

I have asked, as I know many hon. and right hon. Members will have done, whether Durkheim was original in putting forward these ideas, or was merely repeating the teaching of his guide and mentor, Auguste Comte. I have concluded that he was original, because Auguste Comte had a theory that society undergoes three phases in its quest for the truth, according to a general law: the theological, the metaphysical and the positive—sometimes called the scientific—stages. In view of what I have said about God, I have moved beyond the theological stage and have reached what is known scientifically as the demob happy stage. I have not been able to find anything about solidarity, whether mechanical, organic or indeed social, in Auguste Comte’s teachings. There is, anyway, something odd about the notion of organic solidarity.

We can safely attribute proposed new section 1(2)(b) to Mr Durkheim and to the hon. Member for Eltham. In view of how highly I think of them both, it seems a shame to remove that paragraph, but we must do what we must do in this Committee for the good of the country.

What did Mr Durkheim mean by solidarity? In “The Division of Labour in Society”, he answers by turning to an external indicator of solidarity—the law—to look at the two types of social solidarity. He describes societies with mechanical solidarity as tending to be small with a high degree of religious commitment. People in such societies often have the same jobs and responsibilities, which suggests a known division of labour.

Jacob Rees-Mogg (Conservative, North East Somerset)

Would my right hon. Friend be thinking of something such as a monastery or a convent in terms of mechanical solidarity?

James Arbuthnot (Conservative, North East Hampshire)

I think I might, but I will lend my hon. Friend Émile Durkheim’s book so that he can delve into it with the thoroughness for which he is famous. I hope he will discover that his own religious community is well represented in the mechanical and the organic solidarity spheres.

David Nuttall (Conservative, Bury North)

I, too, have looked into this, and it occurred to me in reading about Durkheim’s work that he was perhaps referring not only to those who worshipped a deity in the traditional sense of God or Allah, but perhaps to a tribal society that worshipped, for example, the sun or a particular tree.

James Arbuthnot (Conservative, North East Hampshire)

That is true. In his book, Durkheim says there are many different types of solidarity. He says that

“there are as many classes of juridical rules as there are forms of solidarity.”

Equally, there are many ways of believing in God. One can treat the sun or trees as a god, which is one reason why I am a bit sceptical about the entire business.

Durkheim says that mechanical solidarity denotes a society that is not very complex and that is based on shared sentiments and responsibilities. He then moves on to talk about organic solidarity, saying that it characterises societies that are more secular and individualistic. He puts that down to the specialisation of tasks. He says that organic solidarity is more complex, with a higher division of labour.

Which form of solidarity did the hon. Member for Eltham have in mind when he suggested that we include social solidarity in our statute law? How will we know whether the Secretary of State is fulfilling his duty of delivering

“services of general economic interest”?

What on earth does that mean?

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

I find this conversation about social solidarity fascinating. We are going off into all sorts of different areas. I have to admit that I find the language quite difficult—the terms “mechanical solidarity” and “organic solidarity” are not easily accessible, so there is some confusion associated with this issue. Does my right hon. Friend think the hon. Member for Eltham may have been misguided in selecting the phrase “social solidarity” in the first place to describe what he is trying to enshrine in the Bill?

James Arbuthnot (Conservative, North East Hampshire)

I am grateful to my hon. Friend, but I would always hesitate to describe the hon. Member for Eltham as misguided, because we have pretty much established, without a vote, that he is a good egg. However, I do think his Bill is misguided. I question whether he had quite the tight controlling hand over the drafting of each word as he might have wished, and the drafting may have come from somebody else. However, I hope my hon. Friend will be enlightened to a certain extent about the meaning of social solidarity as I go through my few short remarks.

Jacob Rees-Mogg (Conservative, North East Somerset)

Is my right hon. Friend suggesting that the Bill wended its way to this Committee from what used to be called Transport House?

James Arbuthnot (Conservative, North East Hampshire)

I could, but I should not, speculate about its origins. I am already speculating quite enough about the origins of the words in the measure without speculating about where this bit of paper actually came from. It is possible that the hon. Member for Eltham may have been influenced by some outside sources when putting some of these words in his Bill. We are looking forward to hearing from him about precisely where it came from in due course.

I want to return to the intervention of my hon. Friend the Member for South Basildon and East Thurrock about the words used. It is because of the inaccessibility of the words—my hon. Friend need have no fear; I will come on to that issue—that I proposed various amendments to replace the concept of social solidarity with the concepts of cohesion and public benefit, which are easier to understand.

How will we know whether the Secretary of State is fulfilling his duty to deliver services in the general economic interest? How will we know whether he is fulfilling his duty to ensure that the health service is operating on the basis of social solidarity? Let us suppose that the Secretary of State decides to close a hospital because it is performing poorly. Would he be failing to act on the basis of social solidarity? Let us suppose that he decides not to close it. Would he be failing in his duty to deliver a service in the general economic interest?

Greg Knight (Conservative, East Yorkshire)

Does my right hon. Friend therefore conclude that the Bill is something of a litigants charter, in that it would encourage people to take the Secretary of State to court whenever he makes a decision?

James Arbuthnot (Conservative, North East Hampshire)

Oh yes. Not that I have any objection to litigants charters. I am a lawyer and my wife is a judge, and I approve of anything that improves the income of the struggling legal profession. [ Interruption. ] I am sorry that my right hon. Friend finds that risible.

Will there be statutory instruments that set out the meaning and limits of social solidarity? To a certain extent, those things are covered by clause 2, which is a delight yet in store for us and to which we are all looking forward with a great deal of anticipation and enthusiasm: I am afraid that I will have one or two things to say about it. The next question is, how is the Secretary of State to be described?

Jacob Rees-Mogg (Conservative, North East Somerset)

It is important that my right hon. Friend says a little more about the risk that the Bill would be a litigant’s charter. As he said, there seems to be an implicit contradiction: on the one hand, the Government are reducing the ability to apply for judicial reviews, and on the other hand, the Bill would introduce something that may allow endless judicial reviews.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend need have no fear, I shall. I had only just begun.

How is the Secretary of State to be described in relation to acting on issues of general economic interest and, in particular, social solidarity? We all know that newspapers like a snappy headline. I fear that we will see the headlines, “Jeremy Hunt becomes less solid shock”, or “Andy Burnham insufficiently social”, or—horror of horrors—“Nigel Farage teeters on the brink of liquidity”. Speaking for myself, I would dearly love to become a little less solid, which is why I am on the 5:2 diet despite the chocolate. However, we might question whether solidarity is a suitable word for legislation.

David Nuttall (Conservative, Bury North)

Just for my benefit—and maybe for others—will my right hon. Friend explain what he means by a 5:2 diet? Does it mean he eats only two chocolate bars a week?

James Arbuthnot (Conservative, North East Hampshire)

No, it means that on five days of the week I eat as many chocolate bars as I like. I can assure my hon. Friend that that is quite a number. On two days of the week, I have to restrict myself to 600 calories. Those are the days on which it is best to keep out of my way.

My hon. and right hon. Friends and I have questioned the meaning of social solidarity. The question has arisen ever since Mr Durkheim produced his interesting book. A paper read at the Bern meeting of the International Institute of Sociology in July 1909 by Professor Mark Baldwin was titled “The Basis of Social Solidarity”. It begins:

“The difficulty of discussing such a topic as social solidarity arises from the generality of the term”.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am glad that we are at last quoting a Briton. Are we getting good British common sense coming through against continental fancies?

James Arbuthnot (Conservative, North East Hampshire)

I am not sure that we are, because this was published in the American Journal of Sociology. I know that the Americans think that they speak English—a delusion, of which we frequently have to remind them.

Simon Burns (Conservative, Chelmsford)

On a point of correction, will my right hon. Friend accept that American English is nearer to Chaucerian English than our own English?

James Arbuthnot (Conservative, North East Hampshire)

I think the pronunciation probably is; I am not sure whether the words or the concepts behind them are. Perhaps I am being unfair to Professor Baldwin; for all I know, he may have been a Somerset lad who was speaking in Chicago.

Jacob Rees-Mogg (Conservative, North East Somerset)

While my right hon. Friend took an intervention from my right hon. Friend the Member for Chelmsford, I checked the etymology of the name “Baldwin”, which, as I expected, is a good Anglo-Saxon name. With Alfred the Great looking down on us, I think we can claim him as one of ours.

James Arbuthnot (Conservative, North East Hampshire)

I am sorry that we have not been able to limit him to North East Somerset. Perhaps further researches during the course of this Committee will establish precisely where Professor J Mark Baldwin comes from. He goes on to say:

“As a sociological concept, solidarity is an affair of the mutual relations of a group of individuals to one another. As a psychological concept, the term connotes the meaning of these relations as reflected in the mind of the individual”.

In other words, he is saying that it can mean lots of different things. I will not go into that article in greater detail during these few short remarks unless it becomes necessary.

An article written by Art Evans—Evans sounds a distinctly Welsh name, Art does not—was published at Kansas state university.

Jacob Rees-Mogg (Conservative, North East Somerset)

“Art” is very often short for Arthur, which must be the name of a very sound Briton.

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I am trying to catch up with some of the interventions to find out whether they are relevant to the amendments. I remind Members to assist the Chair in doing that.

James Arbuthnot (Conservative, North East Hampshire)

I am grateful to you, Mr Hood. The relevance of this is that, because Art Evans wrote his article, which is called “An Examination of the Concept ‘Social Solidarity’”, published by Kansas state university, the question arises of whether the American concept of social solidarity is similar to the English concept. When I say “English”, I am conscious of the fact that I would normally use “British”.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

I presume that my right hon. Friend means the original French concept of social solidarity. Was not Durkheim French?

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend has caught me out again. I think that one is allowed—correct me if I am wrong, Mr Hood—to speak English and Latin but not French in these Committees. I am not sure that it would be permissible for me—even I were able, which I am not really—to go into the French meaning of Mr Durkheim’s book.

Simon Burns (Conservative, Chelmsford)

Can I help and also possibly disappoint my right hon. Friend? James Mark Baldwin was born in Columbus, South Carolina and was an American.

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend does the Committee a service, as I knew that he would. That was what, in a sense, I was inviting him to do during my discussions about Mr James Mark Baldwin, but he must keep up because we have now moved on to Art Evans. No doubt he will be able to discover where Art Evans originates from. The clue might be in the fact that Kansas state university published in 1977 the Mid-American Review of Sociology. My suspicion is that Art Evans was a mid-American. The summary of Mr Evans’s—or Dr Evans’s or Professor Evans’s—paper is that, although Durkheim’s original definition of social solidarity included both beliefs and practices, modern sociologists—we are talking 1977 here—have empirically operationalised the concept in terms of only beliefs or only practices. He says:

“It is suggested that the modern conceptualisation of social solidarity is invalid because it does not allow the researcher to get close to empirical reality.”

In other words, he is saying that it is all very well for people to say things, but if they do not do what they say, people are not examining the full meaning of social solidarity. He goes into his split of social solidarity, not between mechanical and organic, but between micro and macro sociologists.

Greg Knight (Conservative, East Yorkshire)

The more I hear about Mr Durkheim, the more he seems to me to be a French version of Lord Prescott. Would my right hon. Friend not have done the Committee a greater service if, rather than speculating about what social solidarity means, he had tabled a short amendment giving those two words a definition?

James Arbuthnot (Conservative, North East Hampshire)

Well, perhaps I would, but the difficulty is that with social solidarity—and I will come on to this point—there is no such thing as a short definition. When one looks at what the European Union means by social solidarity—I am afraid I might have to consider that during my few short remarks. There is a guidance document about what constitutes a service of general economic interest. Again, we will have to go into that a bit—although I hate to think what the European Union will have to say about social solidarity, I am afraid we will have to consider it.

Art Evans says:

“According to Durkheim, social solidarity should be treated as any moral phenomenon, i.e., not directly measurable.”

The hon. Member for Eltham is trying to include in statute law a concept that is not directly measurable, if we accept what Art Evans suggests. I therefore suggest that we do not include it. My suggestion is perfectly simple: leave it out, or exchange it for something that might be directly measurable.

Art Evans says lots of other things, but I do not want to trespass on your patience, Mr Hood, by going into the macro-sociologist and social solidarity, or the micro-sociologist and social solidarity, because we would all lose the will to live.

Jacob Rees-Mogg (Conservative, North East Somerset)

Before my right hon. Friend moves on, and so that we have a basic understanding of these broad principles, is it fair to say that mechanical solidarity is equivalent to micro, and organic solidarity to macro?

James Arbuthnot (Conservative, North East Hampshire)

No. That would be a grotesque over-simplification of what is contained in Mr Durkheim’s book and Mr Evans’s article. I am almost speechless at the triviality of that intervention. It would not be right to say that micro and macro equal mechanical and organic. If my hon. Friend caught your eye, Mr Hood, he could reconsider his remarks and possibly apologise to the Committee for his triviality.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am extremely grateful to my right hon. Friend for helping me to avoid error. That is why it is so important for him to explain the differences. We can then be clear about what we are looking at before we move on.

James Arbuthnot (Conservative, North East Hampshire)

I hope that my hon. Friend will find that we are a little clearer at the end of my few short remarks, or perhaps the Committee will accept that there is no clarity on this issue. That is an important point, which we need to consider when we introduce legislation.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

My right hon. Friend is being generous. As I have said in previous interventions, I am finding the language inaccessible, and the more we discuss this issue, the more complicated and complex it becomes. Is there any way he can give us real-world examples, so that we have more of a feel for what mechanical, organic, micro and macro societies are?

James Arbuthnot (Conservative, North East Hampshire)

I am tempted, but I am held back by one thing: my fundamental ignorance, which is quite extreme in this case. I would love to be able to go into the detail of what an organically solid or a mechanically solid society is. I think we can agree that a mechanically solid society is the more primitive, theological society. Mr Durkheim’s aim was to establish that a mechanically solid society did not have a great degree of division of labour. For example, people would be subsistence farmers who would get up and go to work not far from where they lived. They would grow their food, make their furniture, worship their gods and go back home feeling comfortably mechanically solid.

Simon Burns (Conservative, Chelmsford)

Does my right hon. Friend think it would assist the Committee better to understand this if we look at the charter of fundamental rights of the European Union? Social solidarity is one of its six principles, and as my right hon. Friend will know, it is celebrated on 20 December each year, social solidarity day.

James Arbuthnot (Conservative, North East Hampshire)

I suspect that my right hon. Friend has the making of a few short remarks of his own there. He might enlighten the Committee and, less importantly, me. I was not aware that 20 December was such an auspicious day or that this was a matter of such supreme importance in the EU. I look forward to what my right hon. Friend has to say, so that I can learn. It is always a pleasure to attend such a Committee to improve one’s education. I hope that with what I have been able to say so far about Mr Durkheim, Mr Evans and Professor Baldwin, the Committee’s education is being steadily improved.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

In my right hon. Friend’s response to my earlier intervention, he talked about mechanically solid and organically solid society. He seems to have dropped the “solidarity”, the mechanical solidarity bit. Is he interchanging solidarity with solid, and are they the same definitions?

James Arbuthnot (Conservative, North East Hampshire)

Really I was making a joke. It is always a mistake to make a joke in Committee because it gets translated into undying words in Hansard, and when one is 93 I assume one gets revisited by those words because Hansard has to make everyone appear to be deeply serious and sensible all the time. From time to time in Committee one has to have a bit of fun. The point I was making about being mechanically solid is that it is not entirely clear what solidarity means. That is why I have produced my amendments about cohesion and public benefit.

As it is not entirely clear what all this means, there is a risk that clause 1 will turn out to be fuzzy rubbish. I do not want to say that it is fuzzy rubbish for four main reasons. First, I do not want to be rude and it would be to say that it is fuzzy rubbish. Secondly, it is clear that the national health system is, with all its faults, one of the icons of our society. As I have said, we all in this Committee fundamentally believe in the NHS. We muck about with it at our peril. If we can tease out what it means, we want to achieve a comprehensive health service that operates on the basis of social solidarity. Thirdly, I believe that the hon. Member for Eltham is genuinely motivated by the good of the country and the national health service.

The fourth and most important reason is that clause 1 is not fuzzy rubbish. It is far from it. The two phrases,

“services of general economic interest”,

and operating,

“on the basis of social solidarity”

have special meaning. They are terms of art. They are in the Bill for a purpose. It is true that they are the sort of “in” speech I hate, are understandable only to the initiated and the types of phrase that give lawyers and law a bad name, but it is the duty of each member of the Committee to set out to understand these phrases, the part they can play in the NHS and whether this proposed new law, set before us to change the existing order of things, is good or bad.

Greg Knight (Conservative, East Yorkshire)

If I follow my right hon. Friend correctly, is he saying that the promoter of the Bill is a good egg but the Bill is a curate’s egg and we should not swallow it in its present form?

James Arbuthnot (Conservative, North East Hampshire)

I like my right hon. Friend’s juxtaposition of concepts. I accept that the promoter of the Bill is a good egg. I do not accept that the Bill is a curate’s egg. I think that it ought not to proceed and I will set out why in due course.

The purpose of these phrases is to change the existing order of things. I remind the Committee that the existing order of things is not very old—it is just over two years old. One might think it wise to leave the provisions of the Health and Social Care Act 2012 in place for a few years’ more to see whether stability might allow the Act to work as well as it was intended. I remind the Committee that the law which brought in the concept of competition, which the Bill is designed to change, was introduced by a Labour Government. As the hon. Member for Eltham said in his barn-storming speech on Second Reading,

“I accept that the last Labour Government unlocked the door to competition”.—[Official Report, 21 November 2014; Vol. 588, c. 539.]

Amendment 1 would remove the requirement to provide

“services of general economic interest”,

and to act,

“on the basis of social solidarity”.

To explain the amendment, I need to explain why the clause introduces these concepts. It is no accident that it does so; it is neither an afterthought nor the product of fuzzy thinking. This is the very first clause of the Bill. What is it about these two concepts that is so central to the Bill’s intentions that they need to come first?

Let us remind ourselves what the hon. Member for Eltham wants to achieve with the Bill. He has been obliging enough to tell us, and he was extremely candid in his barn-storming remarks on Second Reading. He said that he wanted to

“tear the heart out of the hated Health and Social Care Act 2012.” —[Official Report, 21 November 2014; Vol. 588, c. 539.]

Given what he said, it is fair to examine whether by imposing the duty to

“ensure that the health service is a public service which delivers services of general economic interest and operates on the basis of social solidarity”—

it all sounds incredibly innocuous—he is tearing the heart out of the 2012 Act.

We also need to consider whether the Act is indeed hated. Certainly in the pubs and clubs of North East Hampshire, people are not sticking pins into wax effigies of my right hon. Friend the Member for Chelmsford. Perhaps they are doing so in the pubs and clubs of Eltham, but they are certainly not in North East Hampshire and, I suspect, not in the byways of Chelmsford either. In fact, my right hon. Friend is probably carried shoulder-high when people mention the Health and Social Care Act 2012, and he will include it in his manifestos as he delivers them to the residents of Chelmsford to say, “Look what I have achieved.”

I am not arguing that the Act failed to provide for services of general economic interest or failed to operate on the basis of social solidarity—in fact, quite reverse.

Simon Burns (Conservative, Chelmsford)

I am listening carefully to my right hon. Friend, but I have a problem. Frankly, no one has explained to me what “general economic interest” means. To me, it sounds to be either gobbledegook or sinister.

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend has been reading my speech as well—I must keep my speeches under better lock and key. When my hon. Friend the Minister responds to the debate, I hope that he can enlighten the Committee to an extent that I have not been able to do so, but I need to go into what that phrase means with the assistance of a European Commission document that I have with me. It goes into a little detail, so I hope that I can help the Committee a bit. The Minister will be able to do so more.

The hon. Member for Eltham is entirely intentionally trying to set up a certain set of consequences in European law of the introduction of the phrases

“services of general economic interest”

and “social solidarity”. He is doing it on purpose and, as I said, for what he sees as the good of the NHS and the country. They are not, however, meaningless phrases that one can laugh at—we might laugh at them, but they have been litigated over and are the subject of articles in learned journals. The Committee will be pleased to hear that I shall share some of that learning and litigation, so that we can see what the hon. Gentleman is trying to do and why, by moving the amendment, I am trying to stop him doing it. I hope that the Committee will come to a clear idea of such things.

My right hon. Friend the Member for Chelmsford referred to the phrases as “gobbledegook”. It would of course have been helpful had the draftsmen of the Bill, who might not have included the hon. Member for Eltham, been able or even permitted to signpost the fact that such phrases are terms of art, perhaps by adding capital letters to, for example,

“services of general economic interest”.

For some reason, however, the draftsmen of Bills are not permitted to use capital letters, except in rare circumstances.

David Nuttall (Conservative, Bury North)

Does my right hon. Friend agree that although the draftsmen of the Bill might not have been able to use capital letters, they could, if they wished, have included a definitions clause?

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is very far from a fool, but he is treading on ground where angels fear to tread. I will come on to that issue during my few short remarks. When he intervened, I wondered whether he would suggest that we table an amendment to change the phrase

“services of general economic interest”

to include capitals. I suspect that that would be deemed out of order. Still, we have not done that.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

I am learning a great deal this morning. It was only today that I really began to understand that the five words

“services of general economic interest”

are to be taken as a whole, not as five individual words strung together in a random fashion. They have a definition, which is set out on the European Union’s website. How are we supposed to know that from the Bill, or is it to be assumed that we have prior knowledge that it is an established and recognised phrase, which will help those who have to interpret the Bill in the future to understand its true meaning?

James Arbuthnot (Conservative, North East Hampshire)

Indeed. I wish that my right hon. and hon. Friends would stop reading my speeches—it is plain that they have had access, through some awful hack or other, to what I was about to say—because I was about to make exactly that point. It is a shame that we have not been able to use capitals—apparently they cannot be used in legislation—but I was pleased, during our discussion of the amendment tabled by my hon. Friend the Member for North East Somerset, to see that England, at least, was favoured with a capital letter. Perhaps the draftsmen of Bills consider the use of capital letters in legislation to be shouting and therefore rude. In the articles that I shall refer to and in the European Commission staff working document services of general economic interest are referred to in capitals as “SGEI”, although I think that may be taking capital letters a bit too far.

Jacob Rees-Mogg (Conservative, North East Somerset)

I suppose they had to leave out the “O”; otherwise it would have been “soggy”.

James Arbuthnot (Conservative, North East Hampshire)

All I can say to my hon. Friend—if one is allowed to say this—is chapeau. [ Interruption. ] In that case, I congratulate my hon. Friend. He is absolutely right.

In some of the articles, services of general economic interest, or SGEIs as they are affectionately known, are compared with the concept of universal service obligations, or USOs as they are affectionately known. The comparison becomes a little confusing, and some people seem unable to tell the difference between an SGEI and a USO. I sincerely hope that, by the end of these few short remarks, the Committee will have no such confusion and we will all be able to teach our children and grandchildren about the important distinction between those two concepts.

Another paper, entitled “Services of General Economic Interest: Opinion Prepared by the State Aid Group of EAGCP”, is relevant to this discussion. The EAGCP is the Economic Advisory Group on Competition Policy, so I assume that its members know what they are talking about. They certainly know a great deal more about this than I do. They ask:

“What are Services of General Economic Interest?”.

That question has now been at the back of our minds for two weeks. We need to look at that article to find the answer. It states:

“In economic terms, the concept of SGEI”—

I am sorry, Mr Hood, but that is what it says—

“as defined above”—

I will not go into what that definition is, because that would take the Committee’s time and I do not want to do that—

“is closely related to that of “Universal Service Obligations” (USO), that is obligations imposed on one or more firms of a given industry to supply given products or services to all citizens, often though not always on a non-discriminatory basis”.

A service of general economic interest is something that, in general, is provided by Governments, and universal service obligations are imposed on firms or industries by Governments. I think that that is the distinction, but I hope that when my hon. Friend the Minister comes to reply to these short remarks he will be able to tell us whether I am correct.

Jacob Rees-Mogg (Conservative, North East Somerset)

Will my right hon. Friend explain where the economic interest is? That part is not clear. I can see that this is a service obligation, which it might be right—or not—to place upon Governments, but in what sense is it economic or making any contribution to the economy?

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend puts his finger on an issue of extreme complication. I am ashamed to say this, but I am afraid that I will have to leave my hon. Friend the Minister to clear that up. I have been wrestling with this very question for about two weeks. I think it may be something that is of great importance, or it may not, but let us see as we go through this discussion; it may become a bit clearer.

Greg Knight (Conservative, East Yorkshire)

Does not the phrase “general economic interest” have rather sinister undertones? Does it not imply, for example, that someone who has retired and is therefore not contributing to the economy may not be worthy of health care?

James Arbuthnot (Conservative, North East Hampshire)

It might contain that implication. Clearly, it does not in European law. A retired person coming to the Bill—they will, of course, read it with fascination and enthusiasm to see what the hon. Member for Eltham is proposing for them—might think that this is not entirely what they expect of their health service. We are coming back to the issue that my right hon. Friend the Member for Chelmsford described as “gobbledegook”.

David Nuttall (Conservative, Bury North)

Does my right hon. Friend not agree that the real concern and danger is not how a retired person might interpret the Bill—although they may well be very upset and concerned indeed—but how a judge might interpret it if it became an Act? That is the real problem.

James Arbuthnot (Conservative, North East Hampshire)

Indeed so. A little later I will come on to the fact that by passing this phrase into law, we would be delegating our duties as legislators to the courts of this land. I have fewer concerns about that than most people would—I had better, given that I am married to a judge and a lawyer myself—but nevertheless, as legislators, we need to be clear what we are legislating about.

Jacob Rees-Mogg (Conservative, North East Somerset)

May I tempt my right hon. Friend further about that? He says that we would be delegating to our judges, but if we incorporate terms from European law—one in the charter of fundamental rights and one defined by the European Union—we risk making the health service a European competence.

James Arbuthnot (Conservative, North East Hampshire)

That is a fear that I had not actually considered, and I shall need to do so at some length during the short Adjournment between today’s sittings. I ought to tell my hon. Friend that I have a suspicion that this country’s Department of Health—this is trailing my coat a bit—believes that it already delivers services of general economic interest. In view of his intervention about economic interest, I very much look forward to hearing the comments of my hon. Friend the Minister about what takes these issues out of services of “general interest” into being services of “general economic interest”.

I want to get back to the opinion prepared by the state aid group of the Economic Advisory Group on Competition Policy, which mentions universal service obligations and services of general economic interest. I think the group is making a mistake by equating the two, but it states:

“Note also that USO (or SGEI) are by definition services which are provided at a loss by firms, otherwise there would be no need to impose the USO. Therefore firms often need be compensated for the provision of such services.”

We may be groping towards an answer to the question put by my hon. Friend the Member for North East Somerset about why these are economic services, because the providers need to be compensated by Governments.

Mr Hood, you may be wondering whether I am drifting just a touch off the point of my amendment, but, in order to decide whether we leave in or take out of the Bill the concept of

“services of general economic interest”,

we need to be absolutely clear about what we mean by the phrase—what it is, and why it is what it is. The same will also be true in time of the phrase “social solidarity”, but I am getting ahead of myself, because I have a few things to say about that.

On the important issue of capitals, if the draftsman could not have used capital letters to point out that the phrase

“services of general economic interest”

was a term of art, perhaps he could have put the phrase into inverted commas. However, in the rarefied world of the draftsman—to which, as a chancery barrister, I used to belong—inverted commas too are frowned upon, except for delineating those parts of a Bill that are to be left in or taken out. Since he or she could not use capitals or inverted commas, perhaps he or she should have said, “The Secretary of State would, for the purposes of the European rules relating to competition and state aid, be deemed to be providing services of general economic interest,” and all that sort of stuff. However, the draftsman has not given us any pointers towards the purpose of clause 1, so I fear that we will have to rely on our own resources, which are considerable.

Actually, this is the main point of my amendment 78, which relates to the concept of universal service obligations. The phrase is described in a working paper produced by the university of Leicester in October 2009, in which Mike George and Linda Lennard go through what universal service obligations are and the EU’s approaches to essential services. Unfortunately, I shall be talking against my own amendment now, because they say:

“what is meant by universal service obligations in the first place is often unclear and definitions of the concept vary between different sectors. At the same time, universal service needs to be sufficiently dynamic and flexible”

to take account of changes to how law is produced.

I tabled amendment 78 to introduce into the Bill a phrase that is so utterly outlandish that whoever reads it will know that something is up. They will need to go along to some library, or look it up on Google, as I have done once or twice, to see that we are not using normal language here, but an Expression—with a capital E, if I may use capitals. They will have to go and look that up, so they will realise that this innocuous phrase we are introducing—

“services of general economic interest”—

as well as “social solidarity” and everything else will need to be looked up. When they look them up, they will discover that there have been books and articles about them—I have referred to one or two.

My amendment works as a pointer, or a command, to the reader of the clause to go and look this up. Without such a pointer—capital letters, a reference to the European rules relating to competition and state aid, inverted commas, or, indeed, the wording about universal service obligations in my amendment—the layman reading this clause may think, “What on earth does that mean?” They will wonder why, as my hon. Friend the Member for North East Somerset asked, the national health service should be delivering services of economic interest. They will ask whether services of economic interest are the same thing as services that are economically interesting, and what economics has to do with it. Of course, the NHS is of interest, but it is of medical interest, rather than being economically interesting.

Simon Burns (Conservative, Chelmsford)

My right hon. Friend will agree that the primary function and duty of the health service is to provide health care for patients. To talk of it in financial terms, as “economic interest”, is slightly obscene, because that suggests putting money before the care of patients.

James Arbuthnot (Conservative, North East Hampshire)

I think that my right hon. Friend is right, but he might be trying to catch a horse that has bolted. The concept of

“services of general economic interest”

is widely used in the context of European law, but—this will shock him—if discussion in the Slug and Lettuce in my constituency rages around the question of the treatment of someone’s varicose veins, do people come away saying, “Oh yes, that was a service of general economic interest and no mistake”? I suspect that they do not, or at least I have never heard that. Things might be different in the pubs and clubs of North East Somerset, which of course would have much earthier names than The Slug and Lettuce; they would be called names such as The Ploughman’s Arms or The Cattle Grid.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am pleased to say that the public house in the village where I live is called The Crown.

James Arbuthnot (Conservative, North East Hampshire)

I am delighted to hear that. I do not know whether my hon. Friend’s constituents in The Crown discuss varicose veins in terms of services of general economic interest, but if he has heard such a discussion, I would very much like to know the punchline, because that has not been heard recently in North East Hampshire.

As my right hon. Friend the Member for Chelmsford said, to the layman, the phrase

“services of general economic interest”

is gobbledegook. My view is that our laws should be accessible to the layman. I deprecate the use of coded language or in-speak in our statutes or anywhere else. I used to be involved in the Ministry of Defence—the MOD, as it is affectionately known—which is a Department that shortens everything to acronyms. I have always regarded acronyms in phrases as coded language that is a means of excluding the layman from an understanding of the elite’s considerations. That is a bad thing to do, but it is what we would do if we brought the clause into effect.

The laws that we make in the House are the laws of the people. They apply to the people, they are enforced on and by the people, and they are owned by the people. It is therefore only right that such laws should be entirely comprehensible to the people, but the use of coded phrases such as

“services of general economic interest”

and “social solidarity” make them less so.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

I am slightly concerned because, as I mentioned earlier, I did not realise that

“services of general economic interest”

was a discrete, defined phrase. As I read through the Bill, I worry whether it contains other phrases that I and my right hon. Friend might not recognise as a series of connected words about which he has not been able to table suitable amendments to make the Bill clearer for the public, if it were to pass.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is right that there might be such phrases, but we are moving into the context of known unknowns and unknown unknowns. If there are things that need to be amended that I have not recognised, the problem is that I have not recognised them, so I cannot really respond to his intervention with any degree of sense. It might well be that none of this is making a great deal of sense.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

I accept that my right hon. Friend may not know where there are phrases with alternative definitions, but does not that worry him? He has great experience in the House, so perhaps he could advise me where I could turn to find out if there are phrases in the Bill that I would not recognise.

James Arbuthnot (Conservative, North East Hampshire)

It does worry me; the whole Bill worries me. All I can suggest to my hon. Friend—this would take him a bit of time, I am afraid—is that he feeds the entire contents of the Bill, phrase by phrase, into some search engine or other. He might find that that throws up concepts, ideas, problems and issues, as well as suggestions for amendments that might improve the Bill. Although there is quite a long way to go before we can do that, the process would be valuable to the Committee. I am grateful for his suggestion, but I am afraid that he has a lot of work to do.

Greg Knight (Conservative, East Yorkshire)

May I gently suggest that my right hon. Friend is being inconsistent? He has railed against the phrase “general economic interest”, but I notice that amendment 41, to which he has added his name, wants to replace that phrase with the phrase,

“that ensures value for money”.

In NHS terms, what is value for money? If a drug is cheap but occasionally ineffective, is that value for money? If a drug is expensive but wildly effective, is that value for money? He raises as many questions with his own amendments as he does about the Bill’s drafting.

James Arbuthnot (Conservative, North East Hampshire)

Oh dear. My right hon. Friend is, as ever, entirely correct. He has caught me out in an inconsistency. All I can say about that is that

“consistency is the hobgoblin of little minds”

and that

“I am large, I contain multitudes.”

Simon Burns (Conservative, Chelmsford)

My right hon. Friend is being unfair upon himself and unduly harsh. Of course, when he concludes his explanation for our right hon. Friend the Member for East Yorkshire, he will point out that the efficiency and cost-effectiveness of drugs is determined by the National Institute for Health and Care Excellence.

James Arbuthnot (Conservative, North East Hampshire)

Of course I will point that out. Thank heavens somebody is here to put me right in my ignorance.

Jacob Rees-Mogg (Conservative, North East Somerset)

I commend my right hon. Friend’s wisdom in supporting my amendment, because value for money is simple to understand. The term does not have some hidden European meaning. I was trying not to find a phrase that was understandable only to an elite, but to find a phrase that was understood by everybody in their normal use of language. I do not model myself on Humpty Dumpty.

James Arbuthnot (Conservative, North East Hampshire)

Yes, but as my hon. Friend may remember, I found that I had put my name to amendments to the times when we should sit that turned out to be inconsistent. I was clearly pursuing my idea that I should not be consistent in this Committee and I might pursue it again. While I have signed my hon. Friend’s amendment, I will have to consider again whether I support it during the short Adjournment.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

As amendment 41 has been brought up, I want to be clear what it would actually mean. It would insert words into clause 1, which would then read: “services of that ensures value for money”. We may need to remove a particular word, as I am not sure that we can have that. It may be a small drafting error, but someone may need to attend to it.

James Arbuthnot (Conservative, North East Hampshire)

I am sure that my hon. Friend is right. He clearly has much more to say on this than I have. I sincerely hope that that will be put right during the course of the debate.

Jacob Rees-Mogg (Conservative, North East Somerset)

That point was brought up in a previous sitting by the hon. Member for Dumfries and Galloway. I said that it could be corrected on Third Reading, when it is possible to make amendments that are merely verbal.

James Arbuthnot (Conservative, North East Hampshire)

So he did. I had forgotten that moment, which was a delicious one.

My amendments are intended to try to get round the issue of gobbledegook that my right hon. Friend the Member for Chelmsford raised regarding the words “cohesion” and “public benefit”. That is also pursued in amendments 81, 83, 82 and 84 to clause 2. It would not be right to spend too much time at this stage discussing the merits or otherwise of clause 2, because we may have an opportunity to do so when we reach that clause.

I now want to consider why clause 1 would require the Secretary of State to act to

“ensure that the health service is a public service which delivers services of general economic interest and operates on the basis of social solidarity”.

I am sorry to say that it is rather a long story. One of the books I said had been written on the subject is by Dr Michael Sánchez Rydelski. It is entitled “The EC State Aid Regime: Distortive Effects of State Aid on Competition and Trade”. In 2006, when the book was published, Dr Sánchez Rydelski was the deputy director of the legal and executive affairs department of the European Free Trade Association Surveillance Authority in Brussels. I do not know what all of that means, but I suspect it means that he knows what he is talking about.

At the start of his book, Dr Sánchez Rydelski says that

“the Community and its Member States are pursuing economic policies which are conducted in accordance with the ‘principle of an open market economy with free competition’. The EC Treaty thereby relies on the concept of competition as a notion of Community law and a tool for the creation of a Common Market”—

as, indeed, did the last Labour Government, as the hon. Member for Eltham accepts. Dr Sánchez Rydelski continues:

“Free undistorted competition requires that not only private anti-competitive behaviour, but also State intervention in the market, for example in the form of State aid, are subject to control mechanisms. This has been the reason why the Community’s State aid regime”—

we are going to have to go into that in a little detail—

“formed an integral part of the Community’s competition policy from the very beginning.”

As I said, an extremely helpful guide has been published. It is called “Commission staff working document”—I will call it the working document—“Guide to the application of the European Union rules on state aid, public procurement and the internal market to services of general economic interest, and in particular to social services of general interest”. The title is rather long, but that is because these issues are of such extraordinary complexity and importance.

The document runs to 110 pages, which I have, perhaps unwisely, unfairly or in an un-ecofriendly way, printed, because I thought it would be easier to refer to the document in paper form. I am lucky enough to have it with me, but it too requires some explanation, because it does not really start at the beginning. The Committee will be comforted to know that I will do my best to help it through the relevant provisions of the working document and European law.

Greg Knight (Conservative, East Yorkshire)

We all know my right hon. Friend is a raving Europhile, but would all this not be irrelevant if Britain voted to leave the European Union?

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend is right in both parts of what he says: I am a raving Europhile, and all this would be irrelevant if we left the European Union. Whether or not that would be a good thing, it would be taking a sledgehammer to crack a nut. The far easier way to deal with this issue would be to pass my amendment, which takes the relevant words out of the Bill. I almost feel the need to apologise to my right hon. Friend for being a raving Europhile, but I am what I am.

Clause 1 - Duty on the Secretary of State to promote comprehensive health service based on social solidarity

Peter Bone (Conservative, Wellingborough)

I remind the Committee that with this we are discussing the following:

Amendment 37, in clause 1, page 1, line 12, at end add—

“as far as is compatible with the liberties of the people of England and without any additional regulatory burden.”.

Amendment 40, in clause 1, page 1, line 15, at end add—

“(c) nothing in this section shall be interpreted as entitling or requiring the Secretary of State to direct people in their personal conduct, nor provide unsolicited advice on diet or behaviour, nor to spend public funds on propaganda, nor to discriminate against specific foodstuffs, nor detrimentally to affect any lawful industry;”.

Amendment 1, in clause 1, page 2, leave out lines 1 to 8.

Amendment 41, in clause 1, page 2, line 2, leave out “general economic interest” and insert—

“that ensures value for money”.

Amendment 78, in clause 1, page 2, line 2, after “interest”, insert—

“pursuant to one or more universal service obligations”.

Amendment 39, in clause 1, page 2, line 3, leave out “social solidarity” and insert “medical necessity”.

Amendment 79, in clause 1, page 2, line 3, leave out “solidarity” and insert “cohesion”.

Amendment 80, in clause 1, page 2, line 3, leave out “social solidarity” and insert “the public benefit”.

Amendment 42, in clause 1, page 2, line 8, at end add—

“subject to consultation with relevant local government bodies”

Amendment 49, in clause 1, page 2, line 13, at end add—

“or is a charge made to a person who is not entitled to free care by virtue of his immigration status.”

Amendment 50, in clause 2, page 2, line 16, leave out “social solidarity” and insert “medical necessity”.

Amendment 81, in clause 2, page 2, line 16, leave out “solidarity” and insert “cohesion”.

Amendment 83, in clause 2, page 2, line 16, leave out “social solidarity” and insert “the public benefit”.

Amendment 51, in clause 2, page 2, line 18, leave out “mutual cooperation”.

Amendment 52, in clause 2, page 2, line 19, leave out “social solidarity” and insert “medical necessity”.

Amendment 82, in clause 2, page 2, line 19, leave out “solidarity” and insert “cohesion”.

Amendment 84, in clause 2, page 2, line 19, leave out “social solidarity” and insert “the public benefit”.

Clive Efford (Labour, Eltham)

On a point of order, Mr Bone. In my estimation, we have been debating the amendments to clause 1 for more than four hours. I have just checked the record of the progress of the Health and Social Care Bill in Committee. In the first sitting, the Committee dealt with a number of amendments and had four votes. We have had four sittings and are about to start our fifth, but we have not yet had any votes on any amendments whatever. I draw that to your attention and ask whether we will make progress today. At some time in the near future, will you be mindful of accepting a closure motion that the Question now be put?

Peter Bone (Conservative, Wellingborough)

Thank you. It is not my intention to accept a closure motion at the moment, but I am aware of the length of time and in due course perhaps that will happen.

Simon Burns (Conservative, Chelmsford)

Further to that point of order, Mr Bone. To help the hon. Member for Eltham, may I explain why more progress was made when the Health and Social Care Bill was considered in Committee? That Bill was properly drafted and did not include phrases such as “general economic interest” or “social solidarity”, the meaning of which no one knows anything about.

Peter Bone (Conservative, Wellingborough)

That is not a point of order.

Clive Efford (Labour, Eltham)

Further to that point of order, Mr Bone. I remind the Committee that at the end of the sitting on Tuesday 10 February, at 5.41 pm, the Government Members, having spoken for four hours about the need to have time to debate the Bill, moved a motion to adjourn. For the record, the right hon. Member for North East Hampshire voted in favour, and yet he has spoken for more than two hours today. We could have quite comfortably listened to what he had to say on that Tuesday, had he been so determined to make a contribution. It is rather galling that he has taken up so much time today, when we could have listened to his speech two weeks ago.

Peter Bone (Conservative, Wellingborough)

That is not a point of order.

Jacob Rees-Mogg (Conservative, North East Somerset)

Further to that point of order, Mr Bone.

Peter Bone (Conservative, Wellingborough)

If it is a point of order.

Jacob Rees-Mogg (Conservative, North East Somerset)

It is as much a point of order as the one made by the hon. Member for Eltham. Had the Labour party Members stayed that day, we would have been able to have the debate. We were more than willing to stay, but if the Opposition waltz off home, they cannot expect us to stay.

Peter Bone (Conservative, Wellingborough)

Order. The hon. Member knows full well that that is not a point of order. The Committee decided to adjourn and that is entirely up to the Committee.

I call Mr Arbuthnot.

James Arbuthnot (Conservative, North East Hampshire)

The issues are complicated. It is not surprising that it takes time to sort out matters such as how European Community law has responded to the issue of entities such as the national health service. In fact, the European Union has taken 20 years to begin to come close to sorting that out. Various cases, such as the Altmark case, which I will talk about in due course, can take weeks of battle raging among the lawyers. It is therefore right for us to discuss with an appropriate degree of length precisely what the hon. Member for Eltham is trying to do in the Bill—precisely what he is trying to achieve by saying that

“the Secretary of State must… ensure that the health service is a public service which delivers services of general economic interest and operates on the basis of social solidarity”.

This morning I was setting out why most people would not have the slightest idea what that meant. We have to consider various books and journals to work out what it does mean and why it is that the hon. Gentleman is doing what he is doing. Just before we rose this morning, I was saying that one such book is by Dr Michael Sánchez Rydelski, entitled “The EC State Aid Regime: Distortive Effects of State Aid on Competition and Trade”. I read out the opening paragraph of that book, and I went on to say that the matter had been clarified by the working document that was produced by the European Commission. This Commission staff working document describes how the European Union had been struggling in 2011with the question of how the EU’s state aid rules applied to the way that services of general economic interest could be organised and financed by public authorities in member states.

Of course, that prompts the question of what a service of general economic interest is, but the Committee can rest assured that I shall come onto that. The European Union had been struggling with lots of other things as well, but that is the point that is relevant to this clause and to my amendments. Some of the other things with which it had been struggling will have to be considered in relation to later clauses in the Bill, but that is a pleasure which we must forgo for the moment.

What was this struggle about? It was about two different things: first, the conditions under which compensation for public service obligations constitutes state aid and, secondly, the conditions under which state aid may be regarded as compatible with the treaty on the functioning of the European Union. The European Commission naturally shortens that treaty to “TFEU”, but I hope the Committee will forgive me if I do not. As I have already said this morning, I hate acronyms. This working document begins—although paragraph 1 starts on page 18, which explains how big the index is—by describing and defining three things. The first is a service of general interest, the second is a service of general economic interest, and the third is a social service of general interest.

Oddly enough, since a service of general interest is a concept that is really rather important to European Union law on this issue, it might be thought that the treaty on the functioning of the European Union—or at the very least a protocol under that treaty—might have defined what a service of general interest was. We must look at protocol 26, after having been through protocols 1 to 25 to no avail, to find out what a service of general interest is. Here we discover that that is where it ought to be defined, if it is to be defined anywhere. I have the good fortune to have with me protocol 26 of the treaty on the functioning of the European Union. It states:

“On services of general interest”—

This implies that it will tell us what they are. The protocol is not very long, so I do not need to take too much time over it. It continues:

“The High Contracting Parties, wishing to emphasise the importance of services of general interest, have agreed upon the following interpretative provisions, which shall be annexed to the Treaty on European Union and to the Treaty on the Functioning of the European Union:

Article 1. The shared values of the Union in respect of services of general economic interest within the meaning of Article 14 of the Treaty on the Functioning of the European Union include in particular: the essential role and the wide discretion of national, regional and local authorities in providing, commissioning and organising services of general economic interest as closely as possible to the needs of the users.”

So far, Mr Bone, I am getting very little by way of definition. It goes on:

“the diversity between various services of general economic interest and the differences in the needs and preferences of users that may result from different geographical, social or cultural situations; a high level of quality, safety and affordability, equal treatment and the promotion of universal access and of user rights.”

My right hon. Friend the Member for Derbyshire East—

Greg Knight (Conservative, East Yorkshire)

East Yorkshire.

James Arbuthnot (Conservative, North East Hampshire)

I am so sorry; I have committed one of the greatest political faux pas of my life. He described me this morning as a raging Europhile, and I plead guilty to that.

Greg Knight (Conservative, East Yorkshire)

Raving not raging.

James Arbuthnot (Conservative, North East Hampshire)

A raving Europhile. That extract was raving Europhile-speak that meant, as far as I could tell, nothing at all. We have article 2, which is even shorter.

David Nuttall (Conservative, Bury North)

If I remember rightly, Mr Bone, and I appreciate you were not in the Chair, it was on that very point that my right hon. Friend was making just before the luncheon adjournment that he admitted he was happy to be called a raving Europhile. Would my right hon. Friend confirm briefly whether he agrees that one can love Europe as a continent without having any truck with the European Union, which is an entirely different matter?

James Arbuthnot (Conservative, North East Hampshire)

I entirely agree with my hon. Friend on this as on so many things. I am not saying whether I do love the European Union as an idea, I am just saying that it is perfectly possible to do so. That was the question I was asked by my right hon. Friend the Member for East Yorkshire.

I move on to article 2, which states:

“The provisions of the Treaties do not affect in any way the competence of Member States to provide, commission and organise non-economic services of general interest.”

That comes back to the intervention by my hon. Friend the Member for North East Somerset and I will come to that in due course.

Those treaties and that protocol do not define a service of general interest. In fact, this Commission staff working document accepts and asserts that they do not define a service of general interest. However, it does say that such a service is within the meaning of article 14 of the treaty on the functioning of the European Union. Imbued with hope, we turn to article 14 that treaty, which is clearly where the answer will lie. That article, which is not very long, reads as follows:

“Without prejudice to Article 4”

—do not worry, Mr Bone, I will not trouble you with that, unless anyone wants me to—

“of the Treaty on European Union or to Articles 93, 106 and 107 of this Treaty, and given the place occupied by services of general economic interest in the shared values of the Union as well as their role in promoting social and territorial cohesion, the Union and the Member States, each within their respective powers and within the scope of application of the Treaties, shall take care that such services operate on the basis of principles and conditions, particularly economic and financial conditions, which enable them to fulfil their missions. The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall establish these principles and set these conditions without prejudice to the competence of Member States, in compliance with the Treaties, to provide, to commission and to fund such services.”

I do not know whether you got that, Mr Bone, but I certainly did not. It sounded to me like a load of European guff. It sounds as though it has been drafted by committee, which of course it has been.

As I said, Mr Bone, I shall not trouble you with article 4 of the treaty on the functioning of the European Union, which is full of stuff about the equality of member states before the treaties and treating member states with mutual respect—there are times when I have some difficulty being a raving Europhile—and all of that sort of stuff. Nor shall I trouble you with articles 93, 106 or 107 of the treaty on the functioning of the European Union, because we would all lose the will to live—some of us, I dare say, already have done—so we are going to have to look elsewhere at what service of general interest is.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am grateful to my right hon. Friend for giving way. I agree that the article is quite impenetrable. However, might he try to translate it for us, so that we can develop some understanding, because he is widely regarded as one of the cleverest men in the House of Commons? While we still have the pleasure of his being here, perhaps he could turn his mind to a translation.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is far too flattering. I do not know that I am widely regarded as anything, really, but I will do my best to help the Committee by saying that, for a definition of what a service of general interest is, we are going to have to look elsewhere than to the treaties or the protocols. One good place to start is the 110-page Commission staff working document.

Greg Knight (Conservative, East Yorkshire)

Is not there a way to short-circuit all of this? Amendment 41 in the group we are debating suggests that we leave out the phrase, “general economic interest” and insert the words

“that ensures value for money”.

Therefore if we accepted amendment 41, which my right hon. Friend, by signing it, urges us to do, would not that make all the documents he is referring to irrelevant?

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend is right, although I have to say that my signature means little, apart from on a cheque. We could resolve the issue in other ways, such as by leaving out the entire clause or, indeed, according to my amendment 1, by leaving out subsection (b) and (c), which is my primary aim.

Jacob Rees-Mogg (Conservative, North East Somerset)

My right hon. Friend is generous and tolerant in accepting interventions. With regard to the point made by my right hon. Friend the Member for East Yorkshire, do not we have to discuss these matters, because one cannot be sure which amendments may be approved by the Committee? The Committee needs to be in possession of the full facts and full understanding before coming to Divisions.

James Arbuthnot (Conservative, North East Hampshire)

We do indeed and I suspect we will discuss the issues at a little length to get to the bottom of precisely what the words in the Bill and the amendment mean. Yet to decide whether to amend the Bill, it would be wise and helpful to work out what the Bill itself says. My right hon. Friend, in his impatient way, wants to short-circuit things. I cannot understand why he wants to do that, because these are matters of great interest. I have spent a great deal of time learning about what a service of general interest is and what a service of general economic interest is, and I do not think that it would be right for the Committee to continue in its ignorance on these issues.

Simon Burns (Conservative, Chelmsford)

Is my right hon. Friend surprised by the suggestion made by my right hon. Friend the Member for East Yorkshire? The whole point of this Committee is to study the legislation line by line, to improve it where needed. To do that effectively, one has to know what is behind the legislation and the full implications of the Bill.

James Arbuthnot (Conservative, North East Hampshire)

I am entirely with my right hon. Friend. To be fair to my hon. Friend the Member for North East Somerset, that is precisely what he was saying. It was my right hon. Friend the Member for East Yorkshire who was trying to short-circuit.

Jacob Rees-Mogg (Conservative, North East Somerset)

There has been understandable confusion between my right hon. Friend the Member for East Yorkshire and me. We are very similar in so many ways and I understand why the Committee may have made that error.

James Arbuthnot (Conservative, North East Hampshire)

I am glad that we have been able to clear up that natural misunderstanding.

I said that I was concerned that the treaties and protocols did not bother to define what they meant. Despite their free and easy use of the words “service of general interest” we have to look elsewhere, and I suggest that we look at this working document. On page 21, it asks:

“What is a service of general interest?”—

rhetorically—well not rhetorically, because it goes on to answer:

“Protocol No. 26 to the TFEU concerns SGIs, but does not define the concept”—

as I think I have just said—

“The Commission has clarified the concept in its Quality Framework”.

I know that the Committee would like me to expound at length on the quality framework, but I am going to leave that to somebody else because, while I believe the quality framework is a matter of key importance, I might trespass on the Committee’s good will if I spend time on it myself. However, I hope that others will do so. The concept has been clarified in the quality framework, which explains that services of general interest are

“services that public authorities of the Member States at national, regional or local level classify as being of general interest and, therefore, subject to specific public service obligations”.

I cannot remember if I commented on public service obligations. I have commented on universal service obligations, but I am not sure that I have dealt with public service obligations in sufficient depth. The term “service of general interest”

“covers both economic activities (see the definition of SGEI below) and non-economic services”.

If the term covers both economic activities and non-economic services—this goes back to article 2 of protocol No. 26—non-economic services are not subject to specific European Union legislation and are not covered by the internal market and competition rules of the treaty—at least, that is what this wonderful working document says:

“The latter are not subject to specific EU legislation and are not covered by the internal market and competition rules of the Treaty”.

Services of general economic interest are covered by the competition rules of the treaty, so we need to look at what a service of general economic interest is. Luckily, the working document tells us.

Jacob Rees-Mogg (Conservative, North East Somerset)

My right hon. Friend is referring to the EU working document. Can he tell us what the status of an EU working document is in terms of EU law?

James Arbuthnot (Conservative, North East Hampshire)

I can and I shall. The answer is that it is not part of EU law. It is merely a helpful guide to tourists such as me who wander into Brussels for a bit of light entertainment. The document says right at the beginning:

“This document is a working paper prepared by the Commission’s services. It provides technical explanations, in particular on the basis of concise and sometimes simplified summaries of the legislation and case law on state aid, public procurement and the internal market and, in relation to state aid, of Commission decisions on SGEIs and in particular SSGIs”—

that means social services of general interest.

“This document is not binding on the European Commission as an institution.”

It is not law, so in these discussions we may have to seek out where the law actually lies.

On services of general economic interest, the working document says:

“The Commission has clarified in its Quality Framework”—

which I hope one of my right hon. and hon. Friends will cover in their contributions—

“that SGEIs are economic activities which deliver outcomes in the overall public good that would not be supplied (or would be supplied under different conditions in terms of objective quality, safety, affordability, equal treatment or universal access) by the market without public intervention.”

The document goes on to talk about public service obligations, which I have mentioned briefly. It says:

“A PSO is imposed on the provider by way of an entrustment”—

Committee members will want to know what an entrustment is; they need have no fear, because it is central to the meaning of a public service obligation. Some people equate public service obligations with services of general interest and universal service obligations, but I know that the Committee will not make such a mistake. The document says:

“A PSO is imposed on the provider by way of an entrustment and on the basis of a general interest criterion which ensures that the service is provided under conditions allowing it to fulfil its mission.”

The document suggests that an obligation has a mission, which strikes me as a strange use of language. Nevertheless, it is a European document, and we have to make do with whatever we have.

Stephen Metcalfe (Conservative, South Basildon and East Thurrock)

My right hon. Friend is more experienced in these matters than me, and I have to admit that I am struggling with some of the terminology that he is using. Can he direct me to where I might find some of those definitions? He said:

“A PSO is imposed on the provider by way of an entrustment and on the basis of a general interest criterion which ensures that the service is provided under conditions allowing it to fulfil its mission.”

I am completely lost. Can he at least direct me to where I can access his speech so I can understand more about what he said? He is going a little rapidly for me.

James Arbuthnot (Conservative, North East Hampshire)

I am extremely sorry. I am going a little rapidly for me, actually. My hon. Friend will be pleased to know that the question of what is an entrustment is dealt with in paragraph 51 of the working document. I will come on to it in a moment or two, and I hope I will be able to explain it to the Committee.

The definition of a service of general economic interest in the working document continues:

“The Court has established that SGEIs are services that exhibit special characteristics as compared with those of other economic activities”—

that is where we come on to the issues raised in the Altmark case, which we will need to go through. The document says:

“The concept may apply to different situations and terms, depending on the Member States, and EU law does not create any obligation to designate formally a task or a service as being of general economic interest, except when such obligation is laid out in Union legislation”.

I point out briefly that there is no requirement, according to this working document which, as my hon. Friend the Member for North East Somerset points out, is not law, for the national health service to be designated a service of general economic interest if it already is one. If there is no requirement for the national health service to be designated a service of general economic interest, that raises the question of whether clause 1 is necessary at all. The hon. Member for Eltham need have no concern; we will come on to that.

Daniel Poulter (Conservative, Central Suffolk and North Ipswich)

To pick up on my right hon. Friend’s important point, does he agree that by defining this as being of general economic interest we open up the NHS and how we fund it to challenge under European law?

James Arbuthnot (Conservative, North East Hampshire)

Indeed. The Minister knows, as I hope I have said enough times, a great deal more about this than I do—that would not be difficult. I hope that he will cover that point in his own speech, because it is of extreme importance in whether we agree that the clause should stand part of the Bill.

In this definition patch of the working document the authors go on to define a social service of general interest. It is clear that the terms “service of general economic interest” and “social service of general interest” are not mutually exclusive and there can be overlap between the two. The working document says that social services of general interest that are economic in nature are services of general economic interest. I do not need, I think, to read out the precise definition of a social service of general interest because what is important for the purposes of the clause is a service of general economic interest.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am sorry to press my right hon. Friend on definitions of social general interest and economic interest. In the health service, are we using the word “economic” in its normal context, or are we simply saying that anything that has a cost is automatically economic?

James Arbuthnot (Conservative, North East Hampshire)

Oh dear, my hon. Friend once again plumbs the depths of my knowledge, or my ignorance. I hope that the Minister will be able to explain this to the Committee better than I can. What we are doing in clause 1 is asserting that the national health service is a social service of general interest, which is economic in nature. The question is, can that really be true? The next question is, can we ensure that that is so by statute?

I was troubled over lunch by my hon. Friend’s intervention as to whether the national health service was indeed an economic service. I scouted about a bit and I discovered a paper on competition law from the Office of Fair Trading which came out in December 2004 entitled “Services of general economic interest exclusion: Understanding competition law”. Paragraph 2.4 states:

“A public sector body will be considered to be an undertaking in so far as it carries out economic activities.”

Peter Bone (Conservative, Wellingborough)

Order. I am sorry to interrupt the right hon. Gentleman. I want to make the Committee aware that because we are having an extensive debate on the amendments, and because more amendments have been tabled since the Committee began to sit, I am not going to have a separate stand part debate afterwards. I thought that would be useful for the Committee to know.

James Arbuthnot (Conservative, North East Hampshire)

That is indeed useful to know, Mr Bone, because it means that we can perhaps range a bit wider and discuss not merely the amendments that are before the Committee at the moment.

Paragraph 2.5 of the OFT paper states:

“When assessing whether the provision of state services is economic in nature or relates to non-economic administrative or social functions, the OFT will, while taking into account the particular circumstances of each case, consider how the characteristics of the service provided by the state meet the general principles established by the relevant EC jurisprudence.”

We come to the key part of the article in paragraph 2.6. To a certain extent, it pertains to the issue that my hon. Friend the Member for North East Somerset raised in his intervention this morning when he asked how the national health service can be considered an economic service. Paragraph 2.6 states:

“An entity does not engage in economic activity simply through buying goods or services; the buying must be considered in conjunction with the end use of the goods or services bought. For example, an entity buying goods or services to advance a purely social activity is unlikely to be engaging in economic activity. Equally, the supply of goods or services in the execution of an exclusively social function (such as the provision of health services on a non-profit making basis on the principle of solidarity”—

that is where we are with the clause—

“where the entitlement to services is not dependent on the amount of contributions) is unlikely to be an economic activity.”

That is where we were in December 2004. Paragraph 2.7 states:

“The policy of successive UK governments has been to expose the activity of parts of the public sector to competition or economic regulation, sometimes coupled with privatisation. It is therefore possible that, over time, functions that may once have been considered to be exclusively administrative or social will come to be regarded as economic.”

I think that is where the hon. Member for Eltham is coming from.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am grateful for that revelation. I think my right hon. Friend is saying that, with the Bill, the Labour party is planning to privatise the national health service. That is what the clause would do.

James Arbuthnot (Conservative, North East Hampshire)

I am sure that my hon. Friend does not want to run away with himself.

My understanding of what the hon. Member for Eltham is trying to do is as follows. When the Bill states that the Secretary of State must

“ensure that the health service is a public service which delivers services of general economic interest”,

the hon. Gentleman is not trying to ensure that the health service is a non-economic service, and therefore not subject to the internal market and competition rules of the treaty. On the contrary, he is trying to ensure that it is an economic service that is covered by the internal market and competition rules but which, for reasons to do with social solidarity, will be exempted from them. I hope I have got that right.

The hon. Member for Eltham is nodding sagely; I am relieved, because it suggests that I have.

The House of Commons Library briefing on this issue says:

“The reference to social solidarity in clause 1(2)(b) is, in conjunction with other measures in the Bill, an attempt to exempt the NHS from EU competition law.”

The footnote to that briefing reads:

“If it is established that a service is organized under principles of social solidarity then this is one factor that could be used to argue that an organisation is an undertaking engaged in a social rather than an economic activity—and therefore EU competition law could be held not to apply.”

It continues:

“However, this is a complex area and a more detailed discussion of EU competition law and health policy, including an account of relevant case law – can be found in chapter 8 of Health Systems Governance in Europe: The Role of European Union Law and Policy (Edited by Mossialos E, et al., Cambridge University Press, 2010).”

The Committee will be relieved to hear that I have that chapter about my person. I do not intend to read it all, but on page 346, it says:

“Analysis regarding how competition law could apply to trusts in England’s NHS is an open question worth further study.”

In the Bill we are attempting to enact something that could be used to argue that an organisation is an undertaking engaged in a social, rather than an economic activity. Therefore, EU competition could be held not to apply, but this is a complex area and it is worth further study. If we are going to enact the legislation, the Committee will wish to give it further study; otherwise, it will not be doing its duty. We will need to go into the issue.

Is the working document—this goes to the point raised by my hon. Friend the Member for North East Somerset—correct in the way in which it describes EU law? We will have to look at that. I do not need to say again that the working document is not law. If it is correct—let us assume for these purposes that it is—can the Bill succeed in placing an obligation on the Secretary of State to ensure that the health service is a service of general economic interest? What would happen if it did? Chapter 8 continues on page 366:

“If Member States were to declare that all health services qualified as SGEI, would health systems enjoy a blanket exemption from competition law? Thus far, the Court has not provided a clear answer.”

We have to provide, in this Committee, a clear answer. The hon. Member for Eltham is understandably concerned that this is taking some time, but we will have to do things that, so far, the courts have failed to do, the Library has failed to clarify, and that the working document deals with in undefined ways.

Jacob Rees-Mogg (Conservative, North East Somerset)

My right hon. Friend has raised a profound point. If the courts have not adjudicated on the issue of a declaration of the health service being of general economic interest and taking it outside general competition law, we could pass—without his amendment—a clause that would require the Secretary of State to do something unlawful under EU law which, under the European Communities Act 1972, trumps our domestic law.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is right. I wonder whether that is a two-edged sword. If such a provision were unlawful and trumped by the 1972 legislation, that might make it null and void. I think we ought to be wary of passing legislation that is null and void, particularly when we have the opportunity to consider it in the light of the learning I have talked about.

Jacob Rees-Mogg (Conservative, North East Somerset)

I am indebted to my right hon. Friend. Does he think it might be sensible to get counsel’s opinion? Possibly his learned wife might be able to provide us with a learned opinion on the situation.

James Arbuthnot (Conservative, North East Hampshire)

My wife would not thank me or my hon. Friend for such a suggestion. I certainly think it is necessary at this point, given what my hon. Friend has said about getting counsel’s opinion, to interject a completely different issue. It has become clear that the insertion of these phrases into our statutes in the way proposed by the hon. Member for Eltham is ambitious. I shall come on to the reasons it is questionable and unwise. What is utterly apparent is that a private Member’s Bill is not an appropriate vehicle in which to do it.

Greg Knight (Conservative, East Yorkshire)

I do not share my right hon. Friend’s criticism of the hon. Member for Eltham for being ambitious. I think everyone in this building should seek to be ambitious in what they do. I take my right hon. Friend back to what he said. Is he telling us that if a British Government, of whatever political persuasion, issued a declaration that the national health service was a service of general economic interest that that would be it and that the European Commission would accept that as a statement of fact, or would it be able to look behind it and question it?

James Arbuthnot (Conservative, North East Hampshire)

There are two points arising from that helpful intervention. First, I did not criticise the hon. Member for Eltham for being ambitious. I am proud of Members of Parliament who come to this place with a high degree of ambition. He is doing his job very effectively. “Ambitious” is not a dirty word for me; I think he is doing quite the right thing.

I want to come back to the second point raised by my right hon. Friend the Member for East Yorkshire. If the national health service were declared to be a service of general economic interest, then yes, the European Commission would certainly be able to look behind it. Chapter 8 says that thus far the court has not provided a clear answer, so we do not know.

To be fair to the hon. Member for Eltham, he is not, in clause 1, declaring that the national health service is a service of general economic interest. He is doing something subtly different; he is placing a duty on the Secretary of State to ensure that it is a service of general economic interest. That is a different concept. It is a wholly understandable concept, although I think it is misguided and wrong.

Jacob Rees-Mogg (Conservative, North East Somerset)

I was troubled about the hon. Member for Eltham being accused of being ambitious. I recall that Brutus said that Caesar was ambitious and that all ended nastily. I do not see the hon. Gentleman as a tyrant in the way that Caesar was.

James Arbuthnot (Conservative, North East Hampshire)

Indeed. I was saying that a private Member’s Bill is not an appropriate vehicle for such an ambitious undertaking as we have here. If we pass this clause, we are introducing a series of concepts without the possibility of taking oral evidence, without counsel’s opinion—as my hon. Friend the Member for North East Somerset proposes—without any idea of precisely what would happen if we introduced these concepts, and without the protection of a money resolution in the final month of this Parliament. Those points alone are an argument for accepting my amendment to omit those particular provisions. They are not procedural points; they relate to our understanding of what we are trying to achieve in this clause. To do anything other than pass these amendments would run the risk of being reckless with community law and with our national health service. I know that the hon. Member for Eltham would not wish to do that.

I said that we would need to go into the law underlying the working document. I hope Members will forgive me if I say that in order for the Committee to understand precisely what it is I am about to say, we will need to have in the back of our minds the terms of articles 106, 107 and 108 of the treaty on the functioning of the European Union. I shall not read all of those articles; I shall simply read a small, relevant part of each. Article 106 (2) reads:

“Undertakings entrusted with the operation of services of general economic interest or having the character of a revenue-producing monopoly shall be subject to the rules contained in the Treaties, in particular to the rules on competition, in so far as the application of such rules does not obstruct the performance, in law or in fact, of the particular tasks assigned to them. The development of trade must not be affected to such an extent as would be contrary to the interests of the Union.”

Article 107 (1) says:

“Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.”

Article 108 (1) and (2) read:

“The Commission shall, in cooperation with Member States, keep under constant review all systems of aid existing in those States…If, after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the internal market having regard to Article 107, or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid”.

Those are draconian powers.

A few moments ago, I said that the European Union had been struggling with the question of how its state aid rules applied to the way in which services of general economic interest could be organised and financed by public authorities in member states. How great that struggle had become is rather well set out in Dr Sanchez Rydelski’s book, “The EC State Aid Regime: Distortive Effects of State Aid on Competition Trade”. On page 55, Dr Rydelski sets out how the European Union came to be where it now is, particularly how it came to, and then reacted to, what is commonly known as the Altmark case—Altmark Trans GmbH—which was a landmark case. He traces the origin of the phrase,

“services of general economic interest”.

Without an understanding of how the European Union got there, we as a Committee will not be able to make a properly informed decision on whether to leave the words in or to take them out.

On page 55, Dr Rydelski states:

“When the Court of Justice of the European Communities... handed down its judgment”

in the Altmark case,

“it put an end to an almost 20 year old debate on how Member States’ compensation for the costs associated with the fulfilment of public service obligations should be treated under European State aid law. A proper analysis of the role this ruling plays in the State aid surveillance exercised by the European Commission....—pursuant to the jurisprudence on the direct effect of Article 88(3), third sentence... in national law—by the Member States’ courts”

requires—

“a brief outline of the development of the Community Courts’ jurisprudence since the mid 1980s.”

Article 88(3) states:

“The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.”

Dr Rydelski goes on:

“Within a time span of a little less than 20 years the Luxembourg Courts gave, all in all, three different answers to the material question of how compensations, granted by the Member States in return for the fulfilment of a public service obligation, should be treated under Article 87(1)”

of the European Community treaty. That article is now article 107 of the treaty on the functioning of the European Union. I shall not read that out again, because I suspect that members of the Committee might lose the will to live. I shall not read the next couple of pages of that book; I will simply summarise them. Dr Rydelski says that there were three different answers to the material question of how compensation should be treated.

The first answer given by the European court was given in the ruling in a case called ADBHU in around 1984. The European Court of Justice in essence agreed with Advocate General Lenz that

“as long as the indemnities granted out of a public fund did not exceed annual uncovered costs actually recorded by the undertaking, taking into account a reasonable profit, no economic advantage...could be present.”

The second answer—I hope the Committee is keeping up with this, because it is quite important—

Simon Burns (Conservative, Chelmsford)

I am sorry to interrupt my right hon. Friend, but may I seek guidance from him, as he is a lawyer? He talked about a case in 1984. Given the development of the single market from 1986-7 onwards and changes in competition law in the EU over the past two decades, are those cases still relevant today or have they been overtaken by events in the development of competition law in the EU?

James Arbuthnot (Conservative, North East Hampshire)

Again, my right hon. Friend has clearly been reading my speech. One would think that this case was no longer relevant, because of those developments in law, but for the fact that in the third answer that Dr Rydelski mentions in his book, the European Court of Justice reverted to the ADBHU case of 1984 and said that the second answer was wrong. My right hon. Friend anticipated the second answer. In the late 1990s—subsequent to the developments that my right hon. Friend is talking about—two judgments were given in courts of first instance, rather than the European Court of Justice. These were that financial benefits granted by member states merely to compensate for the additional burden incurred by discharging the costs connected with public service obligations did in fact fall under the provision laid down by article 87(1), but could be declared compatible with the Common Market under the derogation provided by article 86(2). The result was the same as in the 1984 case, but a different route was taken.

The Commission changed its practice as a result of that different route. As my right hon. Friend the Member for Chelmsford presaged in his intervention, then came the third answer in 2001 in the Ferring case. The European Court of Justice did not even quote the 1990s judgment, and restored the finding of the 1984 case. This, apparently, caused consternation. Speaking as a British lawyer, I am not quite sure why it caused consternation. This is not an area of law in which I am an expert in any sense. Frankly, there are not many of those now that I have been so long away from practice at the Bar.

My own view is that if a court of first instance decides not to follow a decision of the European Court of Justice, as happened in the 1990s cases, it will hardly be surprising if the European Court of Justice then ignores the court of first instance when the matter comes back before it, as it did. However, there was general consternation. If I were to criticise the book by Rydelski, I would question whether he was quite right to say that three different answers were given in the space of 20 years. It seems rather more like two different answers, followed by a reversion to the first answer, but perhaps I am being pedantic.

The 2001 Ferring case was decided after the oral argument had closed in the Altmark case. There was a lot of heavy criticism of the Ferring case—I referred to consternation—and as a result of that criticism the arguments in the Altmark case were reopened. There was then a battle royal. Some lawyers and some countries supported the ADBHU and Ferring cases, which they described as the “net” concept. Others argued that to treat public service obligations as being outside the remit of state aid rules would be to drive a coach and horses through those rules, and there needed to be a “gross” concept. I can see that my hon. Friend the Member for North East Somerset is clinging very tightly to the intricacies of these arguments.

Those supporting the Ferring case said that there could be no aid in cases where the state simply reimbursed the normal market price of the services of general economic interest which it provided, because that was very similar to those cases where the state simply bought goods and the remuneration paid was no higher than the market price. They said that if the other side—the “gross” side—won, the result would be that every single compensatory measure would have to be notified to the European Commission, which they said would be absurd.

The other side said, first, that the actions of a public authority could sensibly be compared with those of a private market operator only if the intervention by the state had an economic character. Here we come back to the intervention by my hon. Friend the Member for North East Somerset. That side’s second point was that the financing of public services was an activity that typically fell within the exercise of public powers, because one could not really imagine a private operator embarking on such a financing activity on its own initiative. They said that if the European Union adopted the Ferring approach—the “net” concept—in practice nobody would know whether any given measure needed to be notified. That would be absurd. To my genuine shame, I have no idea on which side the United Kingdom found itself in this battle royal. Perhaps we were trying to defend the national health service from depredations of something or other, but I hope that the Minister can tell the Committee which side we were on in the run-up to the Altmark case and why. My hon. Friend the Minister knows far more about these matters than me; I am a tourist in these areas and am able only to flit lightly on the surface of this difficult and complicated area of law, leaping from lily pad to lily pad. I hope that my hon. Friend the Minister can go into it in the depth that it deserves so that we know exactly on what we are legislating.

I have rather shortened these arguments. I suspect that each of them took days, if not weeks or months. They sound a bit like the battle between the Big-enders and the Little-enders in “Gulliver’s Travels”, but they did have some importance because as a result of the change produced by the second answer—going from the “net” concept to the “gross” concept—there were substantial changes in the Commission’s practices. Packages of state aid, for example, to state-aided public broadcasters in several parts of the European Union, were suddenly declared illegal. So these things did matter.

At the end of this epic struggle there was a compromise route—the Altmark case—on which the law of today is founded. The facts of that case are that a competitor sought the annulment of licences granted to the Altmark company to provide regional transport services because Altmark had shown that the routes on which it was providing those services had a loss of just over half a Deutschmark per kilometre, and it received compensation for this negative return. The competitor argued that these were illegal subsidies to provide services and that the licences were therefore illegal under German law.

Jacob Rees-Mogg (Conservative, North East Somerset)

My right hon. Friend is taking us through an extraordinarily interesting area of public law. In the case to which he refers and in terms of its application to the national health service, does it require a complainant to object that the payment by the state is in breach of European law, or would it be a matter for the Commission to enforce? Does that bring us into the area of procurement and the effect that might have under these issues of competition?

James Arbuthnot (Conservative, North East Hampshire)

That is an interesting and important question. I have been a bit flippant from time to time during the course of these few short remarks and I do not know the answer. I hope that at some stage of the discussion, someone will be able to answer that question.

Jacob Rees-Mogg (Conservative, North East Somerset)

I hope that somebody will because it goes to the heart of what is happening. If the clause suddenly brings the national health service under EU competition law and requires differences in procurement procedures between national health service hospitals owned and run by the Government and hospitals owned and run by other service providers, it could be fundamental to the future of the health service.

James Arbuthnot (Conservative, North East Hampshire)

My hon. Friend is right. If he is right in his assessment of what could happen, the safest thing for us to do is to accept the amendment and leave out the two paragraphs.

The national judges in the Altmark case asked the Court to decide whether compensation received by Altmark for providing these transport services contained illegal state aid under articles 73 or 87 of the European Community treaty, which are now articles 93 and 107 of the treaty on the functioning of the European Union.

I needed to tell you those facts, Mr Bone, because it could be argued that a transport case is different from a health one—and indeed it is, because transport services have several different articles devoted to them, specifically in the treaty on the functioning of the European Union, including articles 73 and 79. I shall not—you will be relieved to hear, Mr Bone—take the Committee through those, unless anybody insists that I do. The generally accepted view is that what was said in Altmark can be taken as the basis of the law on all services of general economic interest. The decision of the European Court of Justice in Altmark apparently also caused consternation. There were lots of astonished lawyers all over the place—I think that they ought to get a grip, frankly.

First, the European Court of Justice endorsed the net concept as laid down in that 1983 or 1984 case, ADBHU, which is answer No. 1, and the Ferring case, which is answer No. 3, but it also denied the presence of aid in compensation mechanisms only where all four conditions were met. In other words, it held that public service compensation did not constitute state aid within the meaning of article 107 of the treaty on the functioning of the European Union—which I have read and shall not read again—provided that: first, there is a clear definition of the public services to be discharged; secondly, the establishment of how the compensation is calculated should be done in advance, clearly and transparently; thirdly, there must be strict adherence to the principle of proportionality, meaning that the compensation should not exceed what is necessary to cover the costs incurred in the discharge of the public service obligation, taking into account the relevant receipts and a reasonable profit; and fourthly, the person or body intended to carry out the obligations should be chosen by a public procurement procedure or, if that is not to happen, the compensation should be limited to the costs that a typical undertaking, well run and adequately provided with the means to fulfil the public service, would incur in discharging those duties.

As Dr Sanchez Rydelski says in his book:

“Hardly any ruling in the area of European state aid control has ever triggered such an avalanche of comments in legal literature”,

including, of course, his own comments. I hope that the hon. Member for Eltham will forgive me for saying that it is only right, given the “avalanche of comments” that followed the Altmark case, that we should, in deciding what we are going to legislate about, consider these issues in some detail.

Jacob Rees-Mogg (Conservative, North East Somerset)

Before my right hon. Friend moves on from those important four points, the question that must arise is: how do we determine a fair price in a system that does not have any external competition and may have only a single supplier?

James Arbuthnot (Conservative, North East Hampshire)

I shall come on to that. Let us assume that the Altmark furore has died down and that the commenting lawyers have gone back to earning their money and that the law has remained the same since the Altmark case. The working document produced in 2013 suggests that it has remained the same; after all that back and forth, it is probably a good thing too. However, if we want the national health service to be a service of general economic interest, does it meet the four Altmark criteria? That goes back to the question asked by my hon. Friend the Member for North East Somerset, because if it does meet the criteria, I suggest that it is already a service of general economic interest, and the words in the clause are therefore unnecessary. It is a settled principle of legislation that if the law already provides for something, it is confusing, duplicating, superfluous and complicating—and therefore expensive—to say it again.

If the national health service does not meet the four Altmark criteria, what good are the words in the clause? How much better it would be, would it not—you do not have to answer that, Mr Bone; it is a rhetorical question—to provide in legislation specifically for each of the criteria. It is much better for the Secretary of State to be given a clear set of duties than to be told, “You must produce a service of general economic interest,” or, “You must be socially solid.” Apologies; that was another joke. However, we have not come to that.

Jacob Rees-Mogg (Conservative, North East Somerset)

While my right hon. Friend is still on that point, there is an obvious easy way of making the amendment function, which is to insert the words “notwithstanding the European Communities Act 1972”. Then it would be a superior law and would override the ability of the judges in the Court of Justice of the European Union to strike it down.

James Arbuthnot (Conservative, North East Hampshire)

Crikey, would it? Would that work? My hon. Friend blithely says that that would override the 1972 Act; I am not sure.

Jacob Rees-Mogg (Conservative, North East Somerset)

It would in terms of UK law at least; it might not in terms of EU law, but EU law applies in the UK only because of the European Communities Act 1972, as we reconfirmed it in the European Union Act 2011.

James Arbuthnot (Conservative, North East Hampshire)

Rather than agreeing automatically, as I am ordinarily tempted to do, with my hon. Friend, who knows so much more about these issues than I do, I shall simply say that I hear what he says and am interested in it, and I wonder whether it might not be simpler to accept my amendment and for him to add paragraphs (b) or (c). That would be a neat way of achieving what my hon. Friend wants without having the national health service dragged through the European courts in some great battle over the 1972 Act.

By the way, I apologise to my hon. Friend for saying that being socially solid was a joke, but it was because I cannot work out what adjective would arise out of the word “solidarity”. I think he knows what I mean, but if anybody can enlighten me as to what it would be, I would be extremely grateful. Having said that, I will leave it as a piece of homework for the Committee. I would like to go through whether the national health service actually meets the Altmark criteria.

Greg Knight (Conservative, East Yorkshire)

Has the promoter of the Bill given my right hon. Friend any indication in the margins of the Committee whether he is minded to accept any of these amendments?

James Arbuthnot (Conservative, North East Hampshire)

I do not think that the promoter of the Bill is particularly keen at the moment to speak to me at all. I have not received such an indication, but I am always willing to give way to the hon. Member for Eltham, for whom I have such a high regard.

Clive Efford (Labour, Eltham)

You are doing all right on your own.

Peter Bone (Conservative, Wellingborough)

I would be minded to suspend the sitting for a short while if that would be helpful to the Committee in obtaining some agreement whether amendments could be accepted.

James Arbuthnot (Conservative, North East Hampshire)

I suspect that if the hon. Member for Eltham were to accept my amendment 1, clause 2, which deals with the regulations that clause 1 would require, might need to fall. It is perfectly possible that other provisions would go tumbling down like a pack of cards. I am content for the hon. Gentleman simply to accept my amendment, but I suspect that it goes to the heart of his Bill.

Simon Burns (Conservative, Chelmsford)

May I seek clarification on the deal my right hon. Friend seeks to negotiate with the hon. Member for Eltham? Is he talking about a suspension for the rest of the day or just a tea break?

James Arbuthnot (Conservative, North East Hampshire)

My right hon. Friend suggests—

Clive Efford (Labour, Eltham)

I can bring to a close the discussion about adjourning to negotiate. There is no way I would accept amendment 1, so perhaps we can get back to the substance of the amendments.

James Arbuthnot (Conservative, North East Hampshire)

Indeed—

Simon Burns (Conservative, Chelmsford)

Will my right hon. Friend give way?

James Arbuthnot (Conservative, North East Hampshire)

I cannot give way because I just need to answer that point; then I will come back to my right hon. Friend. I am extremely grateful for that clear statement of intent from the hon. Member for Eltham, which is what I expected.

Simon Burns (Conservative, Chelmsford)

As we are using my right hon. Friend as a conduit for negotiations with the hon. Member for Eltham, are there any other amendments that he might accept in lieu of amendment 1?

James Arbuthnot (Conservative, North East Hampshire)

No doubt he will make that clear in his remarks on the amendments and clause stand part, but I have had no indication about it.

I want to consider whether the NHS meets the criteria from the Altmark case. First, a clear definition of the public services to be discharged is needed, and that brings up the question of what an entrustment is. I told the Committee it would need to get on top of that definition, and hon. Members will see why. I apologise for giving my hon. Friend the Member for South Basildon and East Thurrock the wrong information before, when I gave the paragraph number as 51; that relates to the European Union communication. Paragraph 46 of the working document states:

“An act of entrustment (see Communication para. 51 et seq.) is the act which entrusts the provision of an SGEI to the undertaking concerned and spells out the nature of the task as well as the scope and the general operational conditions of the SGEI. A public service assignment is necessary in order to define the obligations of the undertaking and of the State. In the absence of such an act, the specific task of the undertaking is unknown and fair compensation cannot be determined.”

I am pretty clear—as is, I believe, everyone in the country—about what the NHS does, offers and is. It provides a comprehensive range of health services to everyone entitled to them—those legally resident here—and the great majority of the services are free at the point of delivery.

Greg Knight (Conservative, East Yorkshire)

The Chair has been kind enough to say that we can have a clause stand part debate. My right hon. Friend just touched on something that bothers me about clause 1. Subsection (1) says:

“The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement…in the physical and mental health of the people of England”.

However, we have no definition of the phrase “the people of England”. My right hon. Friend said he takes it to mean people who are here lawfully, but it might go wider than that, to include people who should not be here at all.

The rest of the debate is in Hansard.