Health Bill [HL]

My Lords, the debate today has shown that this area remains complex. There are a multitude of valuable views and principles that must be balanced. Amendment 14A, tabled by the noble Baroness, Lady Meacher, seeks to raise the level of cap for all foundation trusts to at least 1.5 per cent and introduces a safeguard that private patient activity must in all circumstances be in the interests of the health service. The noble Baroness and I agree that there is a clear case for reform, and I admire the fervour with which she has put her case throughout several debates on this issue. We differ on the means of achieving that aim. The government amendment seeks to provide an interim flexibility for a tightly defined class of foundation trusts that find themselves in a unique position. They as a class are unable to undertake any innovative work or private work or provide any additional private drugs and are prevented from supporting the Government’s well-being agenda. This temporary measure will provide flexibility for these trusts while a full review of the cap is undertaken for all foundation trusts. We have already begun this process with a call for evidence to the NHS and other stakeholders, and we expect to complete the review process by spring. The noble Baroness illustrated the need for a thoroughgoing review. The reason we have not gone further in our amendment is that the risk of unintended consequences is significant and the advantages of developing a solution using the expertise within the NHS are compelling. We do not want to end up once again in our current position with a judicial review on the interpretation of rules ongoing at the same time as the rules are in need of reform. I also regret to say that this amendment presents serious technical difficulties that we would not want to see in law. The noble Baroness’s amendment attempts to introduce a safeguard that, on the face of it, we could all agree with. However, the safeguard also serves to show how difficult this area is. It requires that the private patient activity must in all circumstances be in the interests of the National Health Service. Wording of this type currently exists in legislation and could be a useful guiding principle when considering reform of the cap. However, in this instance, it is legally problematic for three reasons. First, a foundation trust is already required by its authorisation to abide by its principal purpose of providing goods and services for the purpose of the health service in England. This is a different test from that proposed by the noble Baroness, Lady Meacher, and it is not clear what Monitor would be expected to do to give effect to the principle as expressed in the noble Baroness’s amendment in addition to the existing requirement. Secondly, the phrase "in the interests of the health service" is currently used only where legislation needs to be deliberately vague. The issue we are debating here is not one of those cases, and the lack of clarity means that the amendment fails to achieve the protection that the noble Baroness desires. The "interests of the National Health Service" is open to several interpretations. Noble Lords can conceive of an argument that it is in the interests of the National Health Service to prioritise private patients to attract talent for a wider benefit, whereas another interpretation might be that prioritising private patients to the detriment of NHS patients is not ever in the interests of the National Health Service. Thirdly, the use of the phrase "National Health Service," rather than the established legal term "health service", introduces uncertainty as to whether the amendment is aimed at the interests of the health service in England and Wales, just England, or those of the National Health Service in Scotland or health services in Northern Ireland. The amendment would create legal uncertainty in an area that has already attracted litigation. It is precisely what the Government’s review process aims to avoid. By conducting a thorough review, the Government hope to avoid such complications and present to Parliament a solution that could secure a sensible future for our foundation trusts once and for all—a future that gives them freedom to innovate for the benefit of NHS patients within clearly defined rules that ensure that their fundamental public service nature remains unchanged. Perhaps I may turn to some of the questions asked by noble Lords. The noble Earl, Lord Howe, said that the 5.1 per cent is arbitrary. That number is based on the average cap—