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Last Updated: Friday, 7 November, 2003, 02:03 GMT
Peers reject hospital plans
A nurse working in an operating theatre
The bill is one the most controversial pieces of legislation
Peers have inflicted a major defeat on the government by throwing out plans to create foundation hospitals.

The vote sets up a new battle between the Commons and the House of Lords.

Health Secretary John Reid accused peers of wrecking crucial legislation and he vowed to fight to reverse their action when the bill returned to the Commons.

Plans to give limited operational and financial freedom to some hospital trusts in England form the main part of the government's flagship Health and Social Care Bill.

The Conservative Party is disappointed to have to object to plans which ... appeared to be exactly the kind of policies that we would have introduced when in government
Earl Howe

Conservative and Liberal Democrat peers joined forces to defeat the measure, which was also opposed by some Labour and independent peers.

The government lost the vote on foundation hospitals by 150 votes to 100.

The bill is due to return to the Commons before the end of this parliamentary session in a fortnight.

'Disappointment'

Critics of the foundation hospitals plans say they will damage the NHS and could result in a two-tier health service.

The bill has already caused major problems for ministers and resulted in one of the largest Commons rebellions last summer when the government's 164 working majority was cut to just 35.

Earl Howe
Earl Howe: Foundation hospitals could 'disadvantage' NHS
Mr Reid said: "I am very disappointed that members of the House of Lords have proactively sought to wreck this crucial piece of legislation.

"As they well know their role is to scrutinise and improve legislation and by doing this they have gone well beyond their role."

He added: "The government will do all it can to reverse this action when the bill returns to the Commons as it remains firmly committed to decentralising and giving more power to the NHS frontline."

Counter productive?

Tory peers say the government has failed to answer their concerns that the bill will not deliver genuine freedom to hospitals, that non-foundation hospitals will suffer and the whole exercise will be costly and ineffective.

Conservative health spokesman Earl Howe said he felt "genuinely disappointed" that he felt compelled to oppose "devolution" in the NHS but said the government's proposals were flawed.

"I am desperately worried by these proposals because of what they will do to force and tie the hands of management in ways that could be profoundly counter productive for people's health care," he said.




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