My Lords, we now come to what may prove next week to be an interesting area: the relationship between the CMA and the sector regulators. This is the first point where it arises in the Bill, and it relates to the list of sector regulators. It is not a substantive point in terms of the nature of that relationship, but because the Government seem to think that that relationship is not entirely right at the moment and we know that we will be getting a hefty amendment in the name of the noble Lord, Lord Marland, next week on the Secretary of State’s powers in relation to the sector regulators and the CMA, it is important that the list of designated sector regulators is in fact the right list.
This amendment and a later one on the more substantive issues attempt to alter the list as set out in the Bill in two ways. The first is to remove Monitor from the list. The second, which I will deal with first, is the issue of how we will deal with the Financial Services Bill, which has yet to receive Royal Assent, and the establishment of the Financial Conduct Authority, because that will be the equivalent sector regulator for financial services and its powers will not be quite the same in some respects as those of the sector regulators that regulate the one-time nationalised industries such as water and gas. Nevertheless, it is the equivalent body and should therefore have an equivalent relationship with the CMA. There is no reference to any financial regulator in any of these lists. That may simply be for the technical and probably constitutional reason that the Financial Services Bill is not yet in law but, if that is the case, then presumably the FSA should appear there. I would like to know the Government’s intentions on that.
There is another complication regarding that Bill: in some respects, the prudential regulator could have an effect on the structure of markets as well. There is therefore a crossover there with the role of the CMA. We will come back to the substance of that, but it would be interesting to know the Government’s intention in that respect.
The other point relates to Monitor. Monitor is the economic regulator, and various other things, under the new National Health Service regime. The issue of competition in the health service was one of enormous complexity during the passage of the NHS reform Bill. It was one over which the Government gave substantial reassurances that the role of competition would not cut across the primary concern of NHS patients, which was that they would be treated effectively, resources would be deployed effectively for them and there would be seamless integration of the health service regarding their treatment. That will cut across the competition criteria that apply to the other sectors covered by the other regulators. Indeed, Monitor itself in its own objectives set out that integration and co-operation are its main priorities.
I think I am right in saying that at least once during the course of the NHS Bill the noble Earl, Lord Howe, indicated that in issues where there was conflict between competition and co-operation in providing a seamless service to the patient, then co-operation would trump competition. I am not arguing that the role of Monitor in increasing competition in the health service should be reopened, but I am saying that it is an entirely different situation from that which applies, for example, to Ofgem or the railways, where there are clear criteria, either continuously or at the point of franchise, about competition. Here, though, it is not the main aim of the health service to maximise choice; choice can be a contributor to patient comfort and outcomes but the main purpose is actually to provide an effective service for the treatment of that patient. The interaction between the CMA and Monitor in the health service, therefore, would be entirely different from the interaction between it and the other sector regulators. That is why I wish to remove Monitor from the list. There may be a separate reason for a relationship, but it is not the same as the rules being proposed for the overall relationship between the CMA and the sector regulators.
I advise the Government, gently, not to reopen this matter—health service reform was difficult enough for them. People are settling down now to make it work but the idea that another authority might come in under this Bill and overrule a health service body trying to square off competition and co-operation would reopen huge anxieties among health service professionals, patient groups and the new commissioning body. The Government would be wise to take it out. They can do it at this point without too much attention but if what they are proposing gets out there, they will be in serious trouble. I beg to move.