Reid urges House to give hospitals financial freedom

John Reid, the Health Secretary, rounded on critics of the scheme to give greater autonomy and financial freedom to top-performing hospitals yesterday. Urging MPs to back the plans for foundation hospitals, he said the House of Lords had rejected "the principle of handing power in the NHS to front-line staff".

Ministers were prepared to accept the majority of "revising amendments" passed by the Lords but were not prepared to let them overturn the majority will of the Commons.

Mr Reid's defence of foundation status was damaged by Clare Short, the former cabinet minister. She said: "Most of us agree that there should be more decentralisation in the health service as we said in our manifesto. But many of us object to this proposal because it takes the most privileged hospitals in the country and decentralises to them and gives them more authority and more privileges - leading to greater inequality. Can you explain why we don't decentralise across the system and only to the most privileged hospitals?"

Mr Reid rejected her charge, insisting the first wave of best performing hospitals included some from catchment areas which were "relatively underprivileged".

But David Hinchliffe, Labour chairman of the health select committee, complained that ministers had failed to consult properly. "We have had no consideration or scrutiny at all of this issue within the Commons. So isn't it unreasonable to suggest that somehow the Lords have behaved unconstitutionally," he said.

Kate Hoey, a former minister, said: "Isn't the crunch of all this that the money and the purse strings are actually held by the Primary Care Trusts [PCTs] ... if we were going to democratise it, it should have started with the PCTs."

The Labour MP Joan Walley warned of the danger of foundation hospitals poaching staff because they would be able to pay more than other hospitals.But Mr Reid said all hospitals were allowed to pay above the minimum rate.

Alice Mahon, the Labour MP, listed opponents to the Government's plans including unions, staff organisations, the Royal colleges, Society of Radiographers, physiotherapists, pensioners, the King's Fund and the public. "Have you ever heard of the expression 'Everybody's out of step except our Johnny?"' she said.

Mr Reid agreed the BMA, consultants, the House of Lords, the Tories, the Liberal Democrats and some of the Royal colleges and unions were opposed. But he said, apart from the unions, they were the same groups that opposed to the creation of the NHS.

Tim Yeo, the shadow Health and Education Secretary, said Mr Reid's plea proved he cared more about his own job than the NHS. "Your concern about how the vote goes this afternoon is not a concern about what that vote will do to patients ... it is a concern about what that vote will do to the Government and your position in it," he said.

The Tories opposed the measures "on grounds of principle" - because they would harm the health service not improve it, he added.

The Liberal Democrats' health spokesman Paul Burstow said the "seeds of a two-tier NHS" on capital and staffing were being sown in the legislation. Backing devolution of the NHS, he said: "Central control, targets and tick boxes, they stifle innovation and initiative in the NHS and one size does certainly not fit the needs of every community or every individual who uses the NHS." But he added: "We don't believe that foundation trust proposals as set out today actually go anywhere near lifting the dead hand of control from the NHS."

The Labour MP Stephen McCabe said he was a "passionate" supporter of the NHS but insisted that it could not "creak along" on the 1948 model and must be reformed.

Foundation trusts were merely a "very small step" towards a less bureaucratic, less centralised health service.

In a withering attack on the proposals the Tory former Chancellor Kenneth Clarke said the Health Secretary was "defending a dog's breakfast" which had an "amazing combination of opponents".

Mr Clarke insisted he was committed to a free NHS, based on equal access to treatment and financed largely by taxation. The Tories also believed that with properly directed patient choice, some competition between providers would lead to improvements in quality and efficiency. But the government proposals represented the "worst of all worlds", he argued.

"This is not creating an important new type of institution which could have exercised more local control of the service. It is now a strange, strange construction, even sillier than Network Rail, which is one of the precedents we have for these new, non-profit-making accountable bodies that the Labour Party seem to be converted to."

Frank Dobson, the former health secretary, warned the hospitals would be damaging and divisive for the NHS and Labour. He said they were intended to reintroduce competition to the NHS and would set hospital against hospital. The new hospitals would have more money and could poach staff from poorer hospitals.

THE LABOUR MPs WHO REBELLED

Diane Abbott (Hackney North & Stoke Newington); John Austin (Erith & Thamesmead); Harry Barnes (Derbyshire North East); Andrew Bennett (Denton & Reddish); Roger Berry (Kingswood); Harold Best (Leeds North West); Colin Burgon (Elmet); Martin Caton (Gower); Michael Clapham (Barnsley West & Penistone); Tony Clarke (Northampton South); Iain Coleman (Hammersmith & Fulham); Frank Cook (Stockton North); Jeremy Corbyn (Islington North); Ian Davidson (Glasgow Pollok); Jim Dobbin (Heywood & Middleton); Frank Dobson (Holborn & St Pancras); Julia Drown (Swindon South); Gwyneth Dunwoody (Crewe & Nantwich); Clive Efford (Eltham); Frank Field (Birkenhead); Mark Fisher (Stoke-on-Trent Central); Paul Flynn (Newport West); Neil Gerrard (Walthamstow); Ian Gibson (Norwich North); Roger Godsiff (Birmingham Sparkbrook & Small Heath); Dai Havard (Merthyr Tydfil & Rhymney); Doug Henderson (Newcastle upon Tyne North); David Hinchliffe (Wakefield); Kate Hoey (Vauxhall); Kelvin Hopkins (Luton North); E ric Illsley (Barnsley Central); Glenda Jackson (Hampstead & Highgate); Helen Jones (Warrington North); Kevan Jones (Durham North); Lynne Jones (Birmingham Selly Oak); Peter Kilfoyle (Liverpool Walton); Andy King (Rugby & Kenilworth); Tony Lloyd (Manchester Central); Christine McCafferty (Calder Valley); John McDonnell (Hayes & Harlington); Alice Mahon (Halifax); Robert Marshall-Andrews (Medway); George Mudie (Leeds East); Doug Naysmith (Bristol North West); Albert Owen (Ynys Mon); Anne Picking (East Lothian); Gordon Prentice (Pendle); Ken Purchase (Wolverhampton North East); Joyce Quin (Gateshead East & Washington West); Brian Sedgemore (Hackney South & Shoreditch); Clare Short (Birmingham Ladywood); Alan Simpson (Nottingham South); Dennis Skinner (Bolsover); Gerry Steinberg (City of Durham; George Stevenson (Stoke-on-Trent South); David Taylor (Leicestershire North West); Jon Trickett (Hemsworth); Desmond Turner (Brighton Kemptown); Joan Walley (Stoke-on-Trent North); Robert Wareing (Liverpool West Derby); Betty Williams (Conwy); Mike Wood (Batley & Spen); Expelled Labour MP George Galloway (Glasgow Kelvin)