Today’s report by the Nuffield Trust and Institute for Fiscal Studies is crucial reading. It suggests some of the political choices which will face the parties in 2015.
In essence, the two respected institutes forecast that the NHS will probably have to halve its long-run rate of growth to adapt to a ‘climate change’ in public finances. This would be less than the average growth rate the NHS enjoyed under the Conservatives in the 1980s and 1990s.
Yet even if the NHS manages this task, all other public spending will still be severely constrained, facing annual growth of less than one per cent.
What might this mean?
For a start, I’d expect a choice between tax cuts or investment in social care at the next election.
On these projections it is hard to see how the Conservatives could implement a reform of social care if they pledge a tax cut. They would therefore need to find a private sector alternative, which evidence suggests is unlikely to be comprehensive.
Labour’s challenge, however, will be to politicise the social care crisis in a time of famine, when it failed to do so in times of feast, and to channel people’s concerns into support for the tax needed to pay for change.
Politically, will older voters prefer a tax cut or a new wealth tax for care?
On the NHS, the service will not be able to find savings this big from incremental efficiencies alone. Genuine questions will be asked about what the package of benefits should be and whether any more should be charged.
In previous times of famine, charges were introduced for items like prescriptions, eye tests and dentistry. Voices on the right will encourage more co-payments to be introduced, in order to maintain the same level of service. They may also encourage a reduction in the NHS offering in order to boost private healthcare.
It seems unlikely that Conservative policy will support new charges or reduced services and, if so, their challenge will be to convince voters that money will not be saved instead through longer queues and reduced access.
Labour will need a convincing vision for how it can maintain both quality and access. That will require support for major hospital reconfigurations, delivering integration between health and social care on the ground, much bolder action to tackle the rising cost of obesity and alcohol and probably – hardest of all – accepting some cuts to staffing. Promising to repeal the Health and Social Care Act will look like a distraction.
To what extent can we expect real choices to be genuinely put before the electorate? NHS chief executive David Nicholson last week called for bolder political leadership. If we don’t get it, the likely scenario is another long period of attrition in public services during which they increasingly fail to meet public expectations.
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Neil Churchill is the chief executive of Asthma UK. This article is written in a personal capacity
“Labour’s challenge, however, will be to politicise the social care crisis in a time of famine, when it failed to do so in times of feast, and to channel people’s concerns into support for the tax needed to pay for change”.
This is misleading. There was no feast. The growth in Britain as also in the United States, was all based on a housing bubble. Look at Martin Woolfs article in the financial times recently
http://www.ft.com/cms/s/0/024b7a7a-bfa7-11e1-bb88-00144feabdc0.html#axzz1zjdci0EL
He understands – as he has said before that financial crises are caused “by the creation of money, out of nothing, by banks often foolish lending.”
When you understand that the banks create 97% of our money supply in the form of loans, you will see that all money is debt, and without regulation, they encouraged the explosion in house prices. The large loans were a major source of our money supply and therefore growth.
But it was bubble growth – growth built on sand. Money spent on goods from China. Keynes would be weeping. We need real growth – a manufacturing base – good wages (strong unions). Then people will be paying taxes, not receiving benefits = money for public spending. Simple really. Read Thomas Palleys “From Financial Crisis to Stagnation.” By Cambridge University Press.
Keynsian capitalism and monetary reform = public services + paid off national debt + lower taxes for the poor.
Could you get more right-wing than suggesting the choice is between “tax cuts and social care”?
As sacicr states, the emphasis must be on jobs growth and if necessary new ways to bring in tax revenues. This does not mean increasing the tax-take from the majority of people but ensuring that every person and company pays its share. An ideal start would be the introduction of Land Value Taxation: if those banking land and properties in the hope of making future profits, were to be charged a tax on the maximum developed potential of the land, we’d soon see an opening up of the markets, together with a fall in land values. People move and can and will find ways to avoid tax. Land doesn’t go anywhere, it’s a finite resource that was once stolen or misappropriated from the true owners – all of us.
If the tax/social care choice is the only one on offer, then Labour really has got a serious problem