Monday, 18 June 2018

The NHS and the Brexit "Dividend"

There we were, innocently discussing Tory lies, and then the Prime Minister goes and drops a whopper. On Andrew Marr yesterday morning, she announced in her pre-recorded interview (naturally) that the NHS is going to receive £20bn in extra funding. That sounds a lot to a casual observer, but the monies amount to a 3.4% increase in the annual budget, putting it below the 3.7% average yearly rise since its foundation and well behind the cash pumped into the NHS over the Blair/Brown years. And how is this going to be funded? May puffed out her chest and without a shred of shame said it would be part financed by the Brexit dividend. Yes, you heard correctly, the Brexit dividend.

It is utter piffle. There is no such thing as a "Brexit dividend". Which is why Jeremy Corbyn would be wise not to talk it up either. This "dividend", according to May, comes from Britain not having to pay membership subs to Brussels. Okay, considering Britain must pay a divorce bill one imagines that's going to be sent in installments. And then we have to think about the customs arrangement or whatever relationship we have to the EU following Brexit. What is very likely once the transition period expires is a continuance of some kind of payment to keep "frictionless trade", or whatever it's called this week, going. There will also be costs arising from policing the border because, you know, taking back control. The duplication of EU agencies to ensure the UK remains "in alignment" with the single market demands resources, the "no change" pledge to farmers and the regions with respect to subsidies and infrastructure investment has to be in place. If it all goes belly up, there's the shady deal the government cut with Nissan whereby billions would be frittered away compensating UK-based big business for tariffs imposed by the EU. And if it doesn't, the UK can look forward to a permanent hit to the economy in terms of falling investment, the movement of business into the EU proper, rising unemployment and all the rest. In other words, there cannot be a dividend, no matter how you cook the numbers. We, as in Labour, have to be entirely honest. Brexit isn't about "opportunities", it's about finding the least worst, least damaging way of leaving the EU, doing the best we can to protect our people and struggling to ensure the elites, chiefly business and the rich, pay the costs for their elite project.

In an uncharacteristic moment of clarity, Jeremy Hunt said the NHS's "birthday present" couldn't be funded from this quarter alone, and would require tax rises, with economic growth picking up the rest of the slack. Huh. If leading Tories get their way, the only thing growing in Britain in the aftermath of Brexit will be the dole queue. Again, this is more never, never. Were Labour to announce their spending plans in such a cavalier, uncosted way its pledges wouldn't be met with indifference on the part of our press. See, for example, the case of the unfunded Tory pledges prior to the 2015 general election. Proof, as if it were needed, that the Conservatives play politics in easy mode.

Yes, this is an entirely cynical exercise. But it lays down a few teasers about how the next Tory manifesto is going to look and who May is targeting. In sum the election, whether it be this Autumn, next year, or 2022, will be fought on the grounds very similar to 2017's. May, or her successor, are going to stake out a Miliband-lite one nationist platform. The NHS focus is a risk, considering the last eight years of cuts, lengthening waiting times, rationing of treatment and downright failure but the hope is the big sum and the boosterist language surrounding it (helpfully, and uncritically amplified by the BBC as ever) will convey an impression of a caring Tory and paternalist government doing something about it. Using the language of a Brexit dividend is dishonest but not entirely stupid, politically speaking. Had Leave not managed to make the link between EU subscriptions and NHS funding during the referendum, then they wouldn't have won. What May is trying to do is short cut the hard graft of winning over new people and trying to ride this elision in the popular, Brexit-supporting imagination. It is an attempt to hold together the declining coalition of Tory voters. And by cloaking it in the divisive idiocies of Leave, it shows scant interest in appealing to younger people for whom the NHS is an issue but, as a general rule, are immune to Tory Brexit posturing.

This isn't to say there aren't problems with the NHS and it doesn't need a significant cash injection. The Tories like to talk about how people are living longer and increasingly it has to be equipped to deal with the diseases and ailments of old age. While true, an entirely unnecessary diversion of resources are soaked up by the administration of the markets in health care. Competition between providers are less the enemies of bureaucrats and more their best friends. And there is the small matter of private providers taking money directly out of the service to fill their piggy banks, tax compliant or not. More money is always welcome, but the inefficiencies built into the system are a Tory innovation, and it's these that are driving down quality and restricting provision. Ultimately, it doesn't matter how much cash is thrown at the NHS. Unless it is reorganised and market mechanisms are removed as the central means of delivering health care, the crisis will not end and bit by bit, more and more of the NHS will slide into private hands. Don't be fooled, more NHS money does not mean the Tories have abandoned their programme of privatisation-by-stealth.


Unknown said...

"May, or her successor, are going to stake out a Miliband-lite one nationist platform."

Which really would place the Tories well to the left of our Blairite comrades. Now I'm all confused. Help!

Ben Philliskirk said...

"Ultimately, it doesn't matter how much cash is thrown at the NHS. Unless it is reorganised and market mechanisms are removed as the central means of delivering health care, the crisis will not end and bit by bit, more and more of the NHS will slide into private hands."

You're quite right, but so little thought goes into this. An awful lot of money is wasted in the NHS, but the call is always for 'more resources'. Until the bureaucratic, target driven, 'businesslike' management culture is scrapped, then it will be like pouring money down a black hole.

Pendragon said...

Let's put some mathematics into this "increase in NHS spending" announcement and let's begin with the simplifying assumption that inflation falls to zero for the next six years.

Under the government's plans, the present annual £115 million budget of NHS England would rise by 3.4% each year until it had reached £135 billion---a £20 billion increase---by 2023-24.

Why did the Conservatives chose £20 billion for the increase? Well, it's an easy number to remember and it works out to be £385 million per week, which is bigger than the £350 million figure on the side of the Brexit bus.

Incidentally, in the year before 2023-24, the increase is £16.5 billion, which is £317 million per week and does not meet the Brexit bus target. In other words the £385 million a week is not coming soon.

Inflation will not, of course, fall to zero: the Consumer and Prices Index (CPI) is currently running at around 2.5% per year. (The CPI is always lower than the RPI which is why the Conservative prefer it.)

Theresa May is pledging that spending---in cash terms, not real terms---on the NHS will have increased by £600 million per week in 2023-24 (that's £31 billion for the year).

So it would seem that the Conservatives are planning on raising spending on the NHS by 4.9% per year to offset the reduced spending power that inflation causes.

(According to the plan £31 billion will have the same spending power in 2023 as the £20 billion has now.)

However if you take 2.5% from 4.9% you're left with 2.4% and this is somewhat less than the 3.4% which is the figure we're all supposed to remember about the increase. To get a 3.4% rise you need inflation to fall to 1.5% per year.

The NHS since it was first formed in 1948 has had average annual rises in its budget of about 3.8% in real terms. So let's hope, as I supposed earlier, that inflation heads downwards from its present value and stays down for five years.