[A-List] UK state: New Labour infighting

[Michael Keaney]

No operator as accomplished as Hain does something without careful
consideration of the future, which, as we know here, is particularly
well-starred, barring any unforeseen disasters. Thus it is clever of him to
appear to play to unease within the ranks of the Labour Party over Milburn's
"foundation hospitals" proposal (aka privatisation via "mutualisation") just
at the point when Blair is looking weaker thanks to the fiasco involving his
wife and the dodgy property dealer. It also points out the reality of
"democracy" in the UK today and the extent to which the Labour Party must
still travel before it can completely shake itself free of its labourist
moorings and wholly inherit the mantle of "state party". While President
Blair is most likely to be toppled in a palace coup akin to that which did
for Thatcher in 1990, his successor must still jump through all the hoops of
internal Labour Party election procedures, and these, as we know, involve
the trade unions. Thus Hain emerges as the conscience of the "left" at an
opportune moment, simultaneously playing the spoiler like he did in the 1997
NEC elections, when he stood as the "sensible left" candidate against Peter
Mandelson and Ken Livingstone, fully intending to prevent the latter from
winning. (In the end Livingstone won handsomely.) Now he's occupying some of
Gordon Brown's territory in signalling his opposition to "foundation
hospitals" -- remember how Gordon has suddenly discovered how dubious
privatisation might be. Meanwhile Blair's circle are spinning furiously
against Brown (the IMF report on the UK economy, Gordon's dodgy forecasting,
etc.) in order to take the flak off Tony and Cherie. And, on cue, our white
knight Hain emerges as the voice of reason. Brilliant.

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Hain supports attack on Milburn's plans for foundation hospitals
By Paul Waugh, Deputy Political Editor
The Independent, 12 December 2002

Alan Milburn, the Secretary of State for Health, faced fresh criticism of
his plans for foundation hospitals last night when Peter Hain, the Welsh
Secretary, appeared to endorse an attack on the policy.

Mr Milburn moved to reassure Labour MPs over his proposals yesterday by
unveiling safeguards on their operation and redirecting billions of pounds
of NHS cash to the poorest areas of England. In a Commons statement on his
plans to free the best hospitals from Whitehall control, the Health
Secretary insisted that he wanted an extension of public ownership of
hospitals rather than privatisation.

But in what seemed to be the first open criticism of the plans by a cabinet
minister, Mr Hain backed a speech by Rhodri Morgan, the Welsh First
Minister, which derided the very idea of foundation hospitals. Mr Morgan was
due to underline the "clear red water" emerging between the Welsh Assembly
and the UK Government in a speech at Swansea University.

According to the text of his speech, he criticises government plans for
foundation hospitals, saying they will be used by those who are already have
the most social advantages. The experiment will end not in patients choosing
hospitals but hospitals choosing patients, the speech says. "In welfare
markets, producer choice, rather than consumer choice, is too likely to be
the outcome."

Speaking in a Welsh Assembly debate, Mr Hain said: "Having had the
opportunity to have an advance look at the text he is delivering tonight in
Swansea, I very much endorse that speech and commend it be read by every
member of this Assembly."

Mr Hain was unavailable for comment last night, but his officials said he
had meant to praise Mr Morgan's right to carve a different path for Wales
rather than criticise government policy. "The whole principle of devolution
means that Wales can do something different and we absolutely respect their
decision to do that. But as a member of the UK Cabinet, Peter has no problem
at all with the Government's policy on foundation hospitals for England," an
aide said.

Mr Milburn also faced a blistering attack from Gwyneth Dunwoody, MP for
Crewe and Nantwich, as he outlined his plans in the Commons.

She dismissed his claims that he would impose a "legal lock" on a future
government seizing the assets of foundation hospitals. "There is no legal
way in which he can bind these trusts," she said.

"To create such foundation hospitals will not only damage the interests of
the patients but will, in a final analysis, create the machinery that any
incoming Conservative government in the future would use to privatise
hospitals."

But Mr Milburn said that any Tory government that wanted to sell off
foundation hospitals would have to seize their assets not from the
Department of Health but from local people who would in effect own their
neighbourhood trust.

The Health Secretary pleased Labour MPs by announcing a new NHS funding
formula that will redirect money to the most deprived areas of the country.

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Milburn tries to defuse row over 'two-tier' hospitals
By Andrew Grice, Political Editor
The Independent, 11 December 2002

Alan Milburn will try to quell Labour's simmering row over the formation of
prestige hospitals today by insisting no NHS trusts will be left to "sink or
swim".

In a document outlining plans for "foundation hospitals", seen by The
Independent , the Secretary of State for Health aims to answer criticism
that the Government is putting in place a "two-tier" National Health Service
by giving more money and freedom to the best hospitals rather than helping
the poor performers.

"Since different NHS trusts have different starting points, different forms
of action are needed ... A mix of incentives, support and intervention is
needed," he writes. "No part of the NHS will be left to sink or swim. Every
part of the NHS will be helped to raise its game." The move will be seen as
a tacit admission that the foundation hospitals strategy has appeared to
focus on the top performers.

In a Commons statement, Mr Milburn will announce that financial freedoms
will no longer be limited to hospitals obtaining the top "three-star"
rating - the only ones allowed to win foundation status. "Two- star"
hospitals will also be allowed more freedom to go ahead with capital
projects without government approval, keep the proceeds of land sales, set
up "spin off" companies and enjoy a lighter inspection regime. The worst or
"no-star" hospitals will qualify for at least £250,000 of high-quality
support and help to draw up improvement plans.

The Health Secretary will also announce safeguards to reassure critics
worried that foundation status is a halfway house to privatisation.

The legislation will ensure the prestige hospitals will operate in the
public interest inside the NHS.