Andrew Lansley has defended the competition agenda set out in the Health Bill during the committee stage its passage through Parliament.

Challenged by members of the Commons bill committee on the price competition and economic regulator role of Monitor, the health secretary said the effect of the changes was to protect commissioners from “abuse”.

He told the committee: “[Competition law] gives you the opportunity to combat abuse.

“The application of competition rules does not stop people commissioning the service they are looking for, it doesn’t require them to put it out to competitive tender all the time.

“They can specify the service they are looking for. It’s transparent in the legislation that we allow them to create more integrated services and commission on that basis.”

Mr Lansley added: “What it doesn’t allow them to do is to engage in an abuse. The moment you engage in, for example, buying services from yourself, you have created an abuse and competition laws would say somebody else who has been closed out by that can step in and bring a complaint.”

The health secretary said the same would apply to “cartelisation” by providers or very large providers using their market dominance to raise prices.

Mr Lansley also said there had been “too many” conflicts of interest in the earlier GP fundholding system and that there was the potential for the same in the new proposals.

He told the committee: “I think there is the potential for conflict of interest. As I was saying about fundholding, one of the things we have done in designing this is to see where things went wrong in the past.

“There were, I’m afraid, too many [conflicts of interest] in the past. And we are designing to escape from that.”