My Lords, I must first apologise to the Minister for not appearing at his briefing yesterday and for coming late to his initial remarks. That will not stop me speaking, if I may.
The regulations are clearly designed to save money. They have little to do with correcting what is a major underlying defect in the tariff system: the perverse incentives that tariffs have introduced. My noble friend Lord Hunt has dealt pretty well with how the regulations were aimed at raising the threshold at which objections can be raised and, equally importantly, levelling the playing field to allow small providers with limited budgets to have the same voting power as very large teaching hospitals with billion-pound budgets, which provide more than 95% of the service. It is rather like non-league football clubs and those in the Premier League having the same voice in their commercial activities. The problem is that, to get 66% of all organisations, including all the small ones, puts those trusts that provide more than 90% of the service in hock to those who provide less than 10%. So it is not much wonder that the highly specialised hospitals—the
Marsdens and Great Ormond Streets, the Institute of Neurology, the Christie hospitals and so on—are voicing strong concerns about the impact on them. Of course, that is why the Government want to shackle them—to keep costs down—but that is at the risk of denying high-quality specialised care to those who need it.
All that has been well rehearsed by my noble friend Lord Hunt and other noble Lords. I really wanted to point out that the regulations do nothing to get round the unintended consequences and perverse incentives of the tariff system, which I raised with the Minister in a previous debate. That system encourages trusts to go down the route of using devices to gain higher incomes and discourages cross-referral between specialists within a hospital when a trust can gain two fees for two referrals from general practice. It discourages consultants from using phone-in follow-up out-patient clinics to save patients the need to travel in to be seen, as a visit to a hospital incurs a higher fee on the tariff. I agree with the noble Lord, Lord Warner, as he rails against the acute hospitals, but I do not necessarily agree with all his solutions.
I support my noble friend’s amendment. The regulations are unwarranted and damage those who provide the vast majority of the service, while doing nothing to get at one of the major defects in the tariff system.