The Staggers

The New Statesman’s rolling politics blog

Why the NHS shouldn’t be spared from cuts

Protecting the £110bn national health budget entails unjustified cuts elsewhere.

By George Eaton Published 07 July 2010 11:03

This morning's Independent reports on growing anger among Conservative MPs over the coalition's costly pledge to ring-fence spending on the NHS. We can expect opposition to intensify as the autumn spending review (due on 20 October) draws closer.

A Tory backbencher is quoted as saying: "MPs are getting a reaction in their constituencies about the cuts to the school-building programme. They are wondering why the NHS should be protected when the future of our children is apparently not." It's a good point. The Tories' promise to protect the NHS (and International Development) from cuts has everything to do with politics and nothing to do with economics.

The decision not to touch the £110bn NHS budget (the development budget is a far smaller £6.2bn) is part of the reason why other departments of key importance (Transport, Housing, Local Government) are now facing savage cuts of up to 33 per cent.

There is a good argument for treating the NHS with care: factors such as an ageing population, drug prices and technology make inflation in the health service roughly 3 per cent higher than in the rest of the economy. But, as in the case of education, this should make the NHS a candidate for limited cuts (about 5-10 per cent), not for no cuts at all.

To his credit, Andy Burnham, the former health secretary and Labour leadership candidate, has argued as much: "The effect is that he [George Osborne] is damaging, in a serious way, the ability of other public services to cope: he will visit real damage on other services that are intimately linked to the NHS."

So far, Labour has failed to land any hefty blows on the coalition over spending cuts. The party's message (when one is discernible) is always hindered by the question: what would you cut? Coming out against ring-fencing could help the party to answer this question.

It could be Labour's Nixon-in-China moment: only the party of the NHS can be trusted to cut with care. It is time to expose the Tories' pledge for the political positioning that it is.

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Tags: Spending Cuts

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2 comments

Wed, 2010-07-07 11:44 — David Wearing1

The left really needs to be careful about letting the deficit fetishists set the terms of this debate. Debating what parts of essential public services need to be cut allows a lot of assumptions to go unchallenged, and the the left should be making it its business to challenge these assumptions.

There is no reason why deficit reduction through cuts should happen as quickly and deeply as either the ConDems or Labour have suggested. The deficit is not the key challenge facing the economy. That is a total myth.

The first challenge is growth. Without sustained growth, and with the possibility of a second recession, not only will a generation of young people be permanently scarred by long term unemployment, but deficit reduction measures may be offset or even outweighed by the fiscal costs of an extended downturn.

The second challenge is financial reform. Without financial reform, deficit reduction is almost pointless. The moral hazard created by the bailouts has increased the threat of a second credit crunch, which in turn will have the same effect on the public finances as the last one. Forcing the public to pay the costs of the crisis - through deficit fetishism - adds another huge dollop of moral hazard to the mix. The public shouldn't be asked to go through this once, let alone twice.

Securing growth and dealing with the financial industry are the priorities. The left needs to be clear about this. Dealing with those issues will also help deal with the deficit. Growth will cut benefit claims and increase tax receipts. Properly taxing the mind-boggling amounts of money that flow through the City will help dampen the most dangerous excesses as well as raising revenue.

Beyond this, any further measures that are necessary to deal with the debt should be prioritised much better. Britain needs to tax wealth and income properly, in the interests of equality, social cohesion and plain justice. Britain needs to massively downscale its military, to the levels of a Norway or a Sweden, and divert those resources to worthwhile activities.

The government can do all those things, and take much longer to balance the books than is being planned, to ensure that it is done in a sustainable, practical and just way.

Only after all the above means are exhausted should we even begin to think about proposing something as drastic, damaging and unjust as a 5-10% cut to public healthcare.

Allowing the right to set the terms of debate has done the centre-left no favours in the last 2 decades. Its time to offer a real critique and an alternative path, now of all times.

Wed, 2010-07-07 11:53 — Susan Allan (not verified)

The nhs will probably get cut back when it comes to light how rude they are being to patients, (I was jumped on and snogged by my psychiatrist in a scene fit for the film "damage") an explanation and effort to deal with the two trusts responsible for hiring our a ward to a porn shoot should be expected, and the psychiatric units. Oh dear the psychiatric units. There's no point in pussy footing round it. The nhs is just as wasteful, and just as arrogant about that waste. There is an unofficial strike going on certainly in the psychiatric units, which has probably been the case for decades, and the patients are either two doped up, mischievous, or genuinely bothered with medical problems to complain!

Try getting treatment for a sore back and being told to p**s off by the receptionist! Then maybe the government will see the light and cut back on the ego trips.