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Lord Forsyth of Drumlean: My Lords, can the Minister confirm that what the noble Lord, Lord Rees-Mogg, wrote in his article is right? The corporation tax now being levied in the Republic of Ireland is 12.5 per cent; here it is 30 per cent. Can he also confirm that under this Chancellor our comparative competitive advantage because of a low burden of tax has been greatly eroded, so that we have slipped down the league tables? The Minister must be aware, as I am aware from evidence that we have received at the Tax Reform Commission, of the complaints being made by companies through the big four accountants that the aggressive attitude of the Inland Revenue is forcing people to look to countries such as Ireland and the Netherlands, which now offer

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a far friendlier business environment, as used to be the case here before this Government came to office.

Lord Sainsbury of Turville: My Lords, one needs to look at the whole package of conditions offered by a country, not at just one tax rate in the entire tax regime. What the figures clearly show is that a lot of companies from other countries looking at us from the outside think that we are the best country to come to. That is a pretty fair judgment.

Lord Razzall: My Lords, does not the Minister accept that one of the results of the free market in takeovers in the United Kingdom is increased evidence of the transfer of headquarters overseas following a foreign takeover? No doubt he will agree that the free market in takeovers in the City of London is a major advantage for it in its role as the leading financial centre in the world, but is he satisfied that there is a level playing field in foreign takeovers, particularly with our European partners and with state-owned and state-subsidised purchasers, of which two obvious examples are what is happening to our ports and with Gazprom and Centrica?

Lord Sainsbury of Turville: My Lords, I do not think that anyone would pretend that there is a level playing field in takeovers, but what should be realised is that, although you can impose restrictions that in the short term may give your country advantages, we now see more and more that American companies will not locate plant or headquarters in other European countries because of such restrictions and the lack of flexibility. That is why they come to this country; they think that it is a more benign environment.

Lord Trimble: My Lords, has the Minister looked at the possibility of raising in the European Union the question of unfair tax competition? That is particularly relevant with regard to corporation tax. The rate in the Republic of Ireland has been mentioned: it is12.5 per cent. It used to be 10 per cent, and it rose by 2.5 per cent partly because of pressure from Europe. Would it not be sensible for the Government to pursue those avenues to try to ensure a reduction in the level of unfair tax competition?

Lord Sainsbury of Turville: My Lords, discussions on unfair tax competition can very much lead to an argument on the harmonisation of tax rates. We are not at all keen to get into the question of the harmonisation of tax rates, a matter that, we think, should remain within the country. Countries need to look at the total package that they offer—and it is a question of the total package. A country can have a very good rate for one form of tax, but it is the total tax rate and overall conditions that really matter.

Prisons: Cell Sharing

3.25 pm

Lord Clinton-Davis asked Her Majesty’s Government:



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The Minister of State, Home Office (Baroness Scotland of Asthal): My Lords, we announced on publication that we accepted in principle Mr Justice Keith's recommendation that the elimination of enforced cell sharing should remain the objective of the Prison Service and that the achievement of that goal should be regarded as a high priority. But we also made clear that the resource implications would be extremely serious. I therefore cannot announce a date by which it will be implemented.

Lord Clinton-Davis: My Lords, I thank my noble friend for that reply. Can she indicate when the changes she mentioned will be made, in the longer and the shorter term, pursuant to the report issued by Mr Justice Keith? What is happening about it?

Baroness Scotland of Asthal: My Lords, the Government have made a preliminary response toall Mr Justice Keith's recommendations; it was published on 29 June. It can be found on the Home Office website, but I am happy to put a copy in the Library. We are considering the report and its recommendations in detail and will provide a full response to all the recommendations by 29 August.

Lord Dholakia: My Lords, now that the prison population is rising by more than 300 a week, what plans do the Government have to accommodate inmates once the maximum is reached? Will the Minister confirm that there are no plans to use police cells for that purpose?

Baroness Scotland of Asthal: My Lords, we have plans in place because of the rise in the prison population. We are exploring all avenues to ensure that spaces are available. As the noble Lord will know, we have done well to date in increasing the number of places. However, prison capacity has increased by about 4,000 in the past two years. We have not finished our investigation and will pursue all avenues to see how we can do better.

Lord Ramsbotham: My Lords, one of thesentences that surprised me in the summary of recommendations from Mr Justice Keith was this:

I find that extraordinary, as I gave him three reports: in 1996, 1998 and 1999, so he ought to have known. What worried me was that a lot of the recommendations had not been actioned.

The Question of the noble Lord, Lord Clinton-Davies, refers to recommendation 1, on enforced cell sharing. Recommendation 9 states:

In view of how recommendations are acted on, can the Minister tell us when those guidelines will be published and who is responsible and accountable for making certain that they are obeyed?



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Baroness Scotland of Asthal: My Lords, as the noble Lord, Lord Ramsbotham, will know, Feltham has changed radically since six years ago. One of the things that gives us a modicum of satisfaction is that the Feltham of today is very different from the Feltham of yesterday. As for the guidelines, those issues have been addressed, and I will certainly write to the noble Lord.

Lord Foulkes of Cumnock: My Lords, will my noble friend confirm that the recommendations apply only to England? As she said, however, they have serious resource implications if implemented. In view of that, would it not be absolute madness to restrict Members of the House of Commons from other parts of the United Kingdom from having a say on matters with resource implications?

Baroness Scotland of Asthal: My Lords, any improper restraint of those who have the privilege of sitting in either House would be quite intolerable.

Baroness Linklater of Butterstone: My Lords, is this not yet another example of how important it is that the Government prosecute even harder their policy of alternatives to custody? We desperately need that at every level. What immediate plans are there to step it up?

Baroness Scotland of Asthal: My Lords, I agree with the noble Baroness that the most appropriate sentence is one that deals with risk and the ability to cut recidivism. She is right that we are energetically pursuing effective alternatives to prison. That can be seen in our five-year plan, in the alliances and in the work that we are engaging in across the board, including other government departments.

Baroness Masham of Ilton: My Lords, does the Minister agree with me that it is also down to the sensitivity of prison officers? For instance, would she agree that an asthmatic should not be put in a cell with a smoker?

Baroness Scotland of Asthal: My Lords, I certainly agree that there is an issue of sensitivity. We have done a great deal to improve the understanding of the risks that prisoners pose but also of their needs, in order better to address them. That can be seen in how we encourage and enable health and education providers to become involved in prisons in a much more direct way.

The Countess of Mar: My Lords, has any assessment been made of the number of people incarcerated in prison who would be better accommodated in mental hospitals if there were places for them?

Baroness Scotland of Asthal: My Lords, we are looking at mental health issues. I am working hard with my right honourable friends in the other place, in the health department, better to assess mental health

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provision and to improve delivery of mental health services. The noble Countess is absolutely right: some prisoners might be far better placed in the mental health estate.

Consolidated Fund (Appropriation) (No. 3) Bill

3.32 pm

Brought from the Commons, endorsed with the certificate of the Speaker that the Bill is a Money Bill, and read a first time.

House Committee

The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Lord Speaker (Baroness Hayman) be appointed a member of the House Committee, and that the Lord Speaker be appointed Chairman in place of the Chairman of Committees.—(The Chairman of Committees.)

On Question, Motion agreed to.

Procedure Committee

The Chairman of Committees: My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the Lord Speaker (Baroness Hayman) be appointed a member of the Procedure Committee.—(The Chairman of Committees.)

On Question, Motion agreed to.

Piped Music and Showing of Television Programmes Bill [HL]

3.33 pm

Lord Beaumont of Whitley: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.

Moved accordingly, and, on Question, Motion agreed to.

NHS: Community Hospitals

3.34 pm

The Minister of State, Department of Health(Lord Warner): My Lords, with the permission of the House, I wish to repeat a Statement on community hospitals made in the other place. The Statement is as follows:

“In the White Paper Our health, our care, our say: a new direction for community services in January, we outlined our proposals to create a new generation of community hospitals and services. Today I am announcing that we will make available up to £750 million of public capital investment to realise that vision and I am publishing guidance

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on how primary care trusts can access this money. A copy of the guidance, Our health, our care, our community: Investing in the future of community hospitals, has been placed in the Library, and copies are available for honourable Members from the Vote Office. “Developments in medical technology and clinical practice are making it possible to provide far more care in local communities closer to where people live and even in people’s own homes. During the unprecedented public consultation for Our health, our care, our say, people made it clear that whenever it is safe and effective they want more convenient local and personal services with more consultations, diagnostic tests and treatments carried out in local facilities. Moving more services out of acute hospitals and into communities will help improve care for patients and deliver better value for money for taxpayers. “We are already making a major investment in GPs’ premises and health and care centres, as well as community hospitals. One billion pounds of capital has been invested through the NHS local improvement finance trusts alone. We will now take the next step by making up to £150 million of capital available starting this year, and for each of the next five years—a total of up to £750 million—for the development of a new generation of community hospitals and services.“This investment capital will be available to primary care trusts for a wide range of community schemes, including the redevelopment of some existing cottage hospitals. Services could include both in-patient and out-patient facilities, diagnostic tests, specialist clinics, minor surgery, health and social care services for people with long-term conditions, dentistry, rehabilitation, and palliative care and other services. For people who are seriously ill or injured, or people needing complex treatments, care will of course remain in acute hospitals, where patients can be treated by specialist teams using the most advanced technology. “Primary care trusts that want to use the new investment capital will need to engage fully with local people to ensure that services are truly designed around the needs of patients and users. They will also be expected to work closely with other local partners, including GP practices and other NHS services, the local council, voluntary organisations and others in the independent sector to develop effective plans. “We made it clear in the White Paper that decisions on the long-term future of existing community hospitals should not be made solely in response to short-term budgetary pressures that are not related to the viability of the community facility itself. We have asked strategic health authorities to assure themselves that all PCT proposals for changes to community hospitals are consistent with the long-term strategy of the White Paper to move care closer to patients’ homes, and to be reassured that local people have been properly consulted.

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“Ultimately, however, changes in the configuration of local healthcare services in a particular area need local decision-making. Primary care trusts, with their broad perspective across hospital, community and primary care, are best placed to make those decisions in consultation with local people and their strategic health authority. This new investment fund will make it easier for PCTs to get the right services in the right place for the people they serve. “Primary care trusts will be able to choose how they use the new capital available: investing it simply as public capital, extending the scope of their local investment finance trust scheme or adopting a new approach, a community venture. This is a more flexible joint venture approach that will provide the opportunity for a wider range of public, voluntary and private parties to pool their skills, or indeed their investment, for the benefit of the local community. Which model is adopted will be a matter for the PCT to decide. “Whatever model is chosen, primary care trusts will of course need to demonstrate that investment proposals are sustainable and can be funded over the longer term. As we set out in the White Paper, we expect to see a strategic shift in how the NHS provides care, with a redirection of funding to support the provision of more convenient services in local communities. Primary care trusts that already have advanced plans for community services should submit their proposals to their strategic health authority by the end of September 2006. For schemes ready to start in 2007-08, proposals should reach the SHA by the end of December 2006, after which there will be a regular rolling programme managed through strategic health authorities.“This new programme builds on the unprecedented investment that we have already made in the NHS. It will help to ensure even better services for patients, with better value for money. I commend it to the House”.

My Lords, that concludes the Statement.

3.40 pm

Earl Howe: My Lords, the House will be gratefulto the Minister for repeating the Statement. An announcement of new money for healthcare will always look like good news, and I very much hope that over the next five years this investment fund will provide a beneficial source of service improvements to patients throughout the country and to the PCTs that serve them.

At the same time one wonders how new this money is and how significant it will prove to be. These are capital moneys. Last year the NHS’s capital budget was underspent by £1.162 billion. There is no shortage of capital at this level. The shortages are in revenue funding. Over the past few months community hospitals have been closing not because PCTs have lacked capital, but because they have found their revenue budgets under acute pressure.



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What I should like to hear from the Minister in the first instance, therefore, is how PCTs can confidently bid for money from this investment fund to build new community facilities when their revenue budgets are likely to be insufficient to enable them to fund the services that those facilities would provide. I do not believe this to be an uncommon situation. Indeed, the problem has been brought into even sharper focus this year as a result of the decision by Ministers to top-slice the growth money going to PCTs. How can PCTs afford to develop their services if the growth money has been cut in this way?

We all understand the desirability of shifting services out of acute settings and into the community—not just into intermediate care but, if it is possible and safe, into patients’ own homes. The Government have made numerous promises to create new community hospitals in local settings. They have spoken about the need to listen to local opinion and the wishes of doctors and patients in an area. Yet in parallel with those promises we have seen community hospitals closing. Whenever Ministers have been challenged on this, they say that it is a matter for PCTs. They talk of the need to reconfigure services.

I have grave doubts about the evidence base on which some of those assurances are founded. If you talk to Members of the other place in whose constituencies hospitals have closed, they speak not of reconfiguration driven by local wishes but of a diminution of services driven by budgetary constraints, and in the teeth of local opinion. Those constraints have their origins in part in the tariff. PCTs purchase care packages in acute settings on behalf of patients, and the tariff for that includes an element of recuperative care. If, following a patient’s treatment in hospital, it is considered that he can safely be moved out of the acute setting and into an intermediate care setting, the PCT has to find additional money to pay for that intermediate care, even though the original payment to the acute trust supposedly includes an element of post-operative care. What is happening to avoid that situation? My understanding is that the so-called unbundling of tariffs, separating out the acute portion of care from the intermediate care portion, will not happen until 2007-08 at the earliest. Is that correct?

I wonder whether the Minister is able to answer a couple of further questions. When PCTs examine the possibility of building a new community hospital, what population base should they regard as appropriate for such an investment? The language on this subject up to now has been that a community hospital should serve a population base of around 100,000 people. The language in the document published today is couched slightly differently. It speaks of community hospitals serving small populations rising to about 100,000. Is there any significance in that subtle change of language? Could it mean, for example, that a town of 40,000 people could warrant a separate community hospital? What range of population do the Government have in mind?

I also want to ask the Minister about partnerships between PCTs and non-NHS bodies in providing

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community services. To what extent have such partnerships, about which the Government have spoken warmly in the past, been pursued as an option by PCTs? Potentially, such partnerships offer considerable promise to the development of effective services, and it would be interesting to hear from the Minister how far they have developed.


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