What's Really Driving NHS Costs?

Let's get one thing straight from the off. The idea of charging a £10/month NHS "membership fee" is bloody stupid. Not just because it violates the principle that health provision should be free at the point of need, but for a whole host of other practical reasons. But let's glide Lord Warner's suggestion into a lay-by for the moment and deal with the concern he aims to address: that the NHS budget is spiralling out of control and something has to be done to arrest it.

Well, no. The NHS is not "unsustainable". The UK consistently ranks as a mid-table spender on health. But costs are increasing, and when you're talking billions of pounds here, billions of pounds there overall spending can look very scary indeed. Which is precisely why those on the right, including Warner, frame it as they do. By making it appear unaffordable they're breaking the ideological ground for yet marketisation, yet more shakedowns of the taxpayer by private health interests.

What are driving costs upwards though? Here are three key drivers.

The first of these is the outcome of what health watchers like to call the "epidemiological transition". That is back in the day, in the NHS's infant years a great effort was made to eradicate the causes of infectious diseases. Slum clearances, sanitation works, better nutrition, immunisation programmes worked together in a sequence of virtuous feedback that improved health and mortality rates right across the board. It's only now with the ominous spectre of drug-resistant TB and other nasties that infectious disease is becoming a public health concern. For most of the NHS's life, costs have been driven by the preponderance of chronic health problems. Partly associated with improved life expectancy, the care demands of broken, worn, aged bodies put pressures on health services. Quite apart from the rising demand for carers, the older you are the more you will need to see a doctor, take drugs, and go in and out of hospital. Particularly with present pensioners, the majority of whom would have had manual occupations of one sort or another, the wear and tear of working life can sneak up on you as you age.

Perhaps in the costs of chronic illness in the future will come down as the jobs of post-industrial Britain tend to be less physically demanding. But on the other hand, mental health problems are on the increase. The NHS may be left coping less with damaged bodies and more with broken minds.

The second are NHS supply arrangements - the servicing of PFI debts, procurement, and - increasingly - the growing costs of new medicines and medical technologies. Though gene screening and therapy, stem cell research, nanotechnology and exotic cocktails of wonder drugs promise a great deal, pharmaceutical companies are having to sink greater and greater quantities of capital into research with gradually diminishing returns. To recoup costs and, of course, make a profit new drugs and new treatments are very expensive. The NHS, however, can act like a captive market for many of these products. In fact, it might make sense to regard our health system as a manifestation of socialism for the rich. Big pharma takes a risk investing in a particular line of research, but mitigating it somewhat is the knowledge there's a guaranteed buyer already lined up. This allows drugs companies a great degree of latitude when it comes to determining a price and, of course, as profit maximisers they're going to ask for the highest price possible. Naturally, as their costs go up so does their charges.

Lastly, there is the bitter fruit of successive waves of marketisation, of which the Tory and LibDem Health and Social Care Act 2012 is the latest manifestation. While health care is free at the point of need in the majority of cases, the NHS is no longer an institution. What it is now is a label, under which wriggles public and private health providers all competing for commissioning contracts to deliver services. It's a complex, abstract business - which is why the government were able to force it through with comparatively little fuss. Strangely, ironically you might say, markets have been introduced into the NHS to drive costs down and strengthen efficiencies. As we know, there are too many politicians who believe the profit motive equals cheaper, better service. In the NHS, as it is in the HE sector too, reams of managers and accountants have to be kept on the payroll to put in bids for services, monitor market signals and, ludicrously, charm, schmooze and lobby funding bodies (Clinical Commissioning Groups) for contracts. Far from eliminating red tape, the market is building new layers of public bureaucracies. It's eating up resources that could be better spent elsewhere.

If one was truly concerned about the NHS bill, might I suggest these be looked at first? But returning to the £10 plan it is, once again, a mark of stupid empiricism - proving the Tories don't have a monopoly on this degenerate, decadent form of political thinking. There are two problems that immediately leap out. The first thing is the charge will strengthen the consumerist tendency among a layer of patients, fuelling a sense of service entitlement that could push up the demand for more GP visits, more drugs, more hospital appointments, and so on. The second and more serious issue is that a system of costs doesn't come for free - how much of the fee would be top sliced by local authorities (Warner supposes it would be collected via council tax)? How much would end up in NHS budgets? How much bureaucracy would be added to the NHS administering the charges system? It's a ridiculous idea, and had it appeared tomorrow it would be dismissed as the foolish larks of an obscure member of the upper house.

Labour's Significant Divide

It must be quiet for the lobby hacks at the moment if Andrew Rawnsley's Observer piece is anything to go by. With a nod to the silly dichotomies of managerial speak, simmering beneath party unity are five divisions: the 35%'ers vs "majoritarians", "transformers" vs "realists", "devolvers" vs "centralisers", Camp Miliband vs Camp Balls, and "Gloomsters" vs "Zennists". In the interests of accuracy, Rawnsley should have specified that these facile divisions are properties of the Parliamentary Labour Party. His grip on what happens in the wider party is no firmer than George Osborne's understanding of economics.

And yet, there is a grain of truth in some of this. Not the actual cleavages spotted by Rawnsley, most of which are Westminster froth. but I am talking about the absence of ideological struggle, of the division of Labour into camps embracing sub-Trot reformism, Bennism, Croslandism, and "common sense" neoliberalism. Away from the economic front you have your Labour Friends of Israel and Labour Friends of Palestine, but these are hardly the lot of substantive divides either. As much as it might annoy the media and the Tories, Labour's unity is less an effect projected by the leader's office and more something substantive in its own right. But why? There are three things going on here.

Firstly, nearly all sections of the party are determined to win in 2015. Regardless of the motives, whether being in opposition "is crap" or because Labour is committed to protecting the most vulnerable, there is a widespread desire to turf the Tories out. Lambasting opponents in the party is good for a crack, but the blue party remains the enemy. The second is a shared consensus about what went wrong last time and how to put things right. All accept that the last Labour government was a soft touch on regulating finance and too chillaxed with market fundamentalism. Keynes is back in fashion and the mood music is for a different, more managed kind of capitalism. Thirdly, the labour movement itself remains in a state of flux. The greater the employment uncertainty there is in the wider economy, the more pressing the decline of lay membership in union structures, the more unions have to attend to their own institutional needs. Acting assertively in their party is lower down the priority list than was previously the case - though Collins might change this.

So much for political divisions. There is, however, another Rawnsley completely overlooks - again, because he's not privy to nor interested in the wider organisation. This cleaves what you might call traditional political tribes, throwing together in the same bed people who'd have been at each others' throats in earlier times. And this divide is between those who wish to rebuild the party anew, and those content on sitting in their committee rooms comfortable reading minutes, massaging the MP's ego and waging the struggle through resolutions no one gets to see. This group is the "we're all full up" brigade - a series of cliques of (mainly) long-standing members scattered across innumerable CLPs. They jealously guard the chair, secretary, and treasurer positions they occupy and are deeply suspicious of new people coming in. Hence they obstruct "up-and-comers" and ignore new enquiries. They refuse to campaign, release monies for campaigns, or, when they do consent to do something, they accidentally sit on leaflets they have been given. They are hidebound and conservative. Inert at best, harmful at worst, they cling to the old ways as if nothing has changed since 1974.

I'm not having a pop at "old people". The divide between renewal and decay does not respect a generational divide, nor abides by a strivers vs the skivers narrative. Again, it's not just a result of bloody-mindedness - the regularity of its spread suggests it's a sociological phenomenon. Whether it be people clinging on because they've invested their identity into it, or it allows them to perform the part of a "player", or they see themselves guarding the party against the predations of national/regional office or new-fangled ideas, as a divide it's real enough, and is more of a factor than Rawnsley's daft classifications.

Leaving it there, however, is not good enough. It's not just a Labour Party issue. It's the same right across the labour movement and politics generally. The Tory Association treasurer still counting cash after 35 years, the LibDem who's been agent since 1970, the Trot party general secretary who's racked up 49 years of service. Experience is fine, keeping a position for long periods is okay. But how does one stop it from becoming pathological and harmful to your party's political interests?

Left Unity and the Labour Movement

Activists gathering in Manchester today for Left Unity's national conference sat down to a welcome lesson in the positive power of celebrity. It took a single tweet from superstar revolutionary Russell Brand for LU to put on 200 new members in the space of 24 hours. Not since Labour's members' page crashed with the signing of the Coalition Agreement has a party been so swamped. It's a nice boost for a project that, to be honest, hasn't done a great deal since November. Yes, there are lots of terribly important documents to endorse and we've just emerged from the winter months, but politics doesn't stand still and electoral contests (63, all told) have been and gone.

Let me get the tedious exclaimer in. The Labour Party is habitually, structurally caught between perceived principle and perceived expediency. It triangulates and capitulates on some issues, and tries to lead public opinion on others. For the amnesiacs out there this didn't begin with Blair. Labour has always done so. Furthermore Labour is less a "(bourgeois) workers' party" of Leninist providence and more a proletarian party, embracing everyone dependent on selling their labour power for a living - be they the salt-of-the-earth or the nice professional with a nice salary. Labour refracts the sectional interests and differential advantages of its base, which explains why Labourism as a set of ideas is notoriously pragmatic, cautious, and compromised. Yet the party has the potential to be more than this precisely because it thrusts these disparate proletarians together. The labour movement has many strands to it, but only by drawing them together in a single party can the potential for general interests and socialist politics come to the fore. For that reason the place for every socialist is in the Labour Party, and that includes pub bore revolutionaries and ultra-left headbangers.

But I'm not naive. There's little chance of anyone coming away from LU's conference with a burning desire to ditch a party that hasn't yet launched from the starting blocks. This isn't just a matter of lefty impatience with the "uselessness" of Labourism, but more a importantly a symptom of disaggregating pressures on the labour movement itself. In the post-war institutional set-up, labour radicalism found a home primarily on Labour's left or in the Communist Party. Ignore the demonology of the CPGB and its small size, it was itself a key pillar in the institutional arrangements mediating employer/employee relations from workplace to trade union leadership level. Trotskyism, if you like, was the "outside" to this institutionalised radicalism - but even then it was firmly oriented to workplaces. It had to engage with and contribute to the compromised unity of the labour movement to propagate their politics.

I'm not going to recapitulate the history of the last 30 years, but needless to say the industrial and political regulation of labour by labour is a thing of the past. Its absence might have something to do with the obsessive and aggressive popular valuation of people in terms of whether they work or not. The labour movement and Labour Party have certainly moved with the neoliberal times, variously accepting, adapting and promoting it. For the radical outside of Trotskyism, the loss of the institutional pond from which it fished threw it into a tailspin. Parties have vanished, split, declined. Most have substituted themselves for the movement, leading to annoying instances of revolutionary identity politics. Whatever their fates, they all reject the accommodation Labour and the labour movement have made with consensus politics. They're not the solution, they're the problem.

Am I indulging a self-important constituency that represents no one but themselves? No. Revolutionary and radical politics are results of real movements in society. Revolutionary socialism never took off in Britain because the workers' movement here was, for the most part, politically integrated early into what you might call capitalist realism. In Europe and further afield in colonial/ex-colonial countries Marxism was officially adopted by countless mass movements. Unsurprisingly, as liberal democracy has spread and labour movements institutionalised (often times by a spell in power by (ex)revolutionaries) so the radical bite has weakened, and the constituency shrunk. But even in Britain, that constituency still exists.

This begs two questions. Election results tend to report back one or two per cent support for left political alternatives to Labour. A small amount to be sure, but can that constituency grow? The second is whether Left Unity can adequately mobilise it.

Predictions in politics are a fraught enterprise. You either don't do it because reality can show you up as wanting, or do it so frequently that eventually you can claim clairvoyant kudos. Osborne was predicting economic growth well before it turned up. Peter Taaffe was forecasting cataclysmic crises of capital every year prior to 2008. I digress. The composition of constituencies are forever changing. They slip, slide, shrink and grow almost as if by themselves. One can imagine that if socialist ideas were better known, if trade unions expanded, if inequality and oligarchy became hotter political issues (which, ironically, is exactly what Ed Miliband is working toward) then the core extra-Labour left constituency might be expected to grow. But this is not going to happen over night, and certainly not while anti-political establishment populism is monopolised by an ex-city pint-drinking demagogue.

However, I've previously observed that voting constituencies are far from unified blocs. And even Namibian termites know that is especially true of populist formations such as UKIP. There is undoubtedly an element, a floating anti-establishment voter if you like, currently plugging UKIP that might find their head turned by a left party peddling left populism. Anecdotally, I found that to be true here in Stoke when I participated in SP election campaigns featuring a BNP opponent.

Can LU be that force? Possibly. It exists for itself and is not beholden to a sect putting its revolutionary treadmill front and centre. But it needs to work out what it's for. Is it merely marking time between now and 2015? Is it prepping Russell Brand for a challenge against Nick Clegg in Sheffield Hallam? Are local elections and by-elections going to be contested? Or are more Facebook debates, talk of union fractions and occasional CIF articles from dear old Ken the dish of the day?

Then there is the second set of questions. What is LU for? Is it a prelude to a farcical reforging of a revolutionary socialist party out of its times? For the likes of the cpgb, Workers' Power etc., it is. Is LU a pressure group to move politics leftwards, just as UKIP and the BNP are/were successful in pulling discourse to the right? If so, how can it do that when these two parties were beneficiaries of consistent and orchestrated efforts between establishment politicians and media? Is LU a "recomposition" project, drawing together dispersed lefties and new generations of campaigning radicals married to a serious labour movement orientation? And, above all, how will it negotiate its relationship to Labour? Is it indifferent to whether 2015 gives us a Labour or Tory government? Will it be standing in mainly safe Labour seats or upping the ante and contesting marginals? And lastly does LU hope to supplant Labour a la TUSC (good luck with that one), or set on a permanent existence as a leftwing "major" minor party alongside the Greens?

These aren't questions I'm going to reply to. It's not my project. But LU needs to clarify them sooner rather than later, because how it answers them might have repercussions beyond its present small size.

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Quarter One Local By-Election Results 2014

Party	Number of candidates	Total vote	%	+/- Q4	Average/ contest	+/- Q4	+/- Seats
Conservative	43	18,344	28.6%	+8.3%	427	+78	-5
Labour	37	20,005	31.2%	-3.3%	541	-136	0
LibDem	32	6,459	10.1%	-0.9%	202	-45	+3
UKIP	31	8,583	13.4%	+0.5%	277	+20	+1
SNP*	3	2,524	3.9%	-1.9%	841	-186	0
Plaid Cymru**	2	1,169	1.8%	-0.5%	585	+330	0
Green	14	1,495	2.3%	+1.5%	107	+15	0
BNP	0			-0.3%		-70	0
TUSC	3	348	0.5%	+0.0%	116	+72	0
Independent***	15	4,109	6.4%	-0.7%	274	+30	+1
Other****	6	1,048	1.6%	-2.9%	175	+6	0

*There were three by-elections in Scotland.
**There were two by-elections in Wales, two of which were contested by Plaid Cymru.
***There were four independent clashes this quarter.
****There were no 'other' clashes in the same contest.

Overall 64,064 votes were cast over 43 individual local authority (tier one and tier two) contests. Fractions are rounded to one decimal place for percentages, and the nearest whole number for averages. You can compare these with Quarter Four 2013's results here.

After being in the doldrums for a wee while, the Tory vote total picked up this quarter while Labour's declined markedly. It doesn't take an eagle-eye to note this narrowing of the latter's lead mirrors recent polling. Or does it? Average performance has closed between the two parties but a gulf still separates them. Not time for the bubbly yet, Conservative folk. Again the quarter's actual and average votes indicates some stabilisation of the LibDem and UKIP support - their fluctuation is far less than that experienced by the big parties. Then again, the Tories and Labour tend to be more affected by the preponderance of minor parties than British politics' second division.

Down in the equivalent of the Vauxhall League, or whatever it's called these days, the BNP haven't been in by-election action since December. Hardly the vibes one might get from an organisation gearing up for a decent showing in the European elections. They're done and are not likely to come back for quite some time, especially as UKIP have cornered the "are you thinking what we're thinking?" racism of that particular electorate.

Local Council By-Elections March 2014

Party	Number of candidates	Total vote	%	+/-  Jan	Average/ contest	+/-  Jan	+/- Seats
Conservative	25	10,511	29.8%	+0.5%	420	-27	-1
Labour	23	10,231	29%	-6.3%	445	-361	0
LibDem	18	4,119	11.7%	+3.0%	229	+29	+1
UKIP	20	5,514	15.6%	+7.5%	276	-1	0
SNP*	1	1,334	3.8%	+3.8%	1,334	+1,334	0
Plaid Cymru**	0			-8.5%			0
Green	9	873	2.5%	+0.4%	97	-48	0
BNP	0						0
TUSC	0			-2.2%			0
Independent***	9	1,761	5%	+0.1%	196	-27	0
Other****	3	886	2.5%	+1.7%	295	+241	0

* There was one by-election in Scotland.
** There were no by-elections in Wales.
*** There were three independent clashes (in one ward) this month.
**** 'Other' this month consisted of the Elvis Bus Pass (67 votes), Monster Raving Loony (15) and the Ratepayers (804 votes).

Overall, 35,229 votes were cast over 25 individual local (tier one and tier two) authority contests. All percentages are rounded to the nearest single decimal place. For comparison see February's results here. Please note Labour's victory in the City of London by-election has not been included in this data set.

The month might appear boring, but five seats did change hands in March. However gains were cancelled put by losses, making it look as though there was but little movement.

Superficially Labour had a pretty bad time of it, but we can lay it at the door of our old friend - geographical variation. Despite this and a number of contests in solid Tory areas its poll average still keeps its lead. The LibDems have had a modest recovery and UKIP did very well. Interestingly for two months now there has been little change in its vote average. Might this indicate UKIP's vote is stabilising and finding a "natural" level from election to election, regardless of variation between contests?