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Blair's NHS reform plans hit by 63 rebel Labour MPs

Andrew Grice
Thursday 08 May 2003 00:00 BST
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Tony Blair's drive to reform public services suffered a setback last night when more than 60 Labour MPs rebelled over his flagship policy to set up foundation hospitals.

Although the rebellion was smaller than ministers had feared, the Government could still run into problems during the passage through Parliament of the Health and Social Bill, which lets high-performing hospitals win more freedom from Whitehall control.

Some 63 Labour MPs voted for a rebel amendment warning that the Bill would increase bureaucracy and "create disparities" between hospitals. It was defeated by 297 votes to 117, a government majority of 180.

The Bill was given a second reading by 304 votes to 230, a government majority of 74, after the Tories decided to abstain rather than vote with the Labour critics. If the Tories and Labour rebels combine their forces at a later stage, a rebellion by 85 Labour MPs could inflict defeat on the Government. Frank Dobson, a former health secretary, said after the vote that the issue would be a "running sore" during the Bill's passage.

Some 124 Labour backbenchers have signed a Commons motion opposing foundation hospitals, but many kept their powder dry yesterday. Others were placated by a string of concessions.

Government whips mounted a huge arm-twisting operation to limit the revolt, and Mr Blair held meetings with potential rebels in his Commons room during the six-hour debate.

Although several Labour MPs warned that the plans would create a two-tier NHS, the debate was less heated than the highly charged one before the Iraq war, after which 139 Labour MPs rebelled. The biggest revolt over domestic policy since Labour came to power was when 67 backbenchers voted against cuts in disability benefit in 1999.

Alan Milburn, the Health Secretary, sought to reassure Labour opponents of foundation hospitals. "It is not about elitism or two-tierism. It is about levelling up, not levelling down. It is about raising standards in every NHS hospital," he told the Commons.

He said his "great fear" was that without reform more people would simply walk away from the NHS. There would be direct elections to foundation hospital boards by local people and local hospital staff, he said. "This is not privatisation. It is democratisation."

Earlier Mr Blair told MPs extra money for the NHS had to be matched by "real reform". He said: "The important thing is ... that at the same time as we're putting this massive investment in the health service, the public sees real reform taking place, because that is the basis upon which they are prepared to support funding."

Mr Dobson, who led the attack on the Government's plans, told MPs that foundation hospitals would become a "cuckoo in the local health nest". They would bring competition back into the NHS which would "set hospital against hospital", he said. Mr Dobson said endless reorganisation had harmed the NHS for years, leaving staff feeling stressed and dissatisfied.

David Hinchliffe, the Labour chairman of the Health Select Committee, added: "We've got permanent revolution and it is impacting on performance at a local level." He warned that the new-style hospitals would poach staff from others. "The policy is wrong. It's a departure from our commitment to a primary care-led NHS. It resurrects the competitive market ethos the Government was elected to get rid of," he said.

Liam Fox, the shadow Health Secretary, said the Tories would oppose the Bill because it would not bring about "real reform". He said the Government's original plans had been diluted by the Chancellor, Gordon Brown, who had limited the powers of foundation hospitals to borrow money. "They will still be subject to suffocating government targets through the star rating system, the emasculating of borrowing powers will create a dog-eat-dog culture within the system. Worse they will create a bureaucratic nightmare," he said.

The Liberal Democrats opposed the plans, warning that foundation hospitals would be "divisive and falsely elitist". Charles Kennedy, the party leader, said: "The genuine case for local decision-making and decentralisation within the health service is a valid one. But this proposal inevitably is going to create two-tierism."

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