Why the Tories will have to consider NHS charges after 2015

With George Osborne determined to avoid further tax rises, patient charges will be the only way to solve the health funding crisis.

Another Spending Review has been settled with the NHS again protected from cuts. But the longer austerity continues, the harder it will be for the government to justify special treatment for some departments. As last week's Resolution Foundation report showed, if the current ring-fences around health, international development and schools are maintained, some departments will have had their budgets more than halved by 2018, with a 64% cut to the Foreign Office, a 46% cut to the Home Office and a 36% cut to defence. Something will have to give. And with the Tories reportedly planning to rule out further tax rises, it will be even harder for any area to escape Osborne's axe (should he still be in the Treasury after May 2015). 

There is a strong case for making an exception for the NHS. Polls show that it is the most popular spending area with voters and the above-average rate of inflation in the health service means it requires real-terms rises just to stand still. As today's SMF paper on the Spending Review notes, "A ‘flat real’ settlement for the NHS is therefore not what it sounds like since it is defined with reference to an irrelevant price index. To keep up with rising input costs, growing demand, and the public’s expectations for an adequate healthcare system, growth in spending on health has historically outstripped GDP growth." 

By historic standards, the NHS is undergoing austerity. Since 1950, health spending has grown at an average annual rate of 4%, but over the current Spending Review it will rise by an average of just 0.5%. As a result, in the words of the SMF, there has been "an effective cut of £16bn from the health budget in terms of what patients expect the NHS to deliver". Should the NHS receive flat real settlements for the three years from 2015-16 (as seems probable), this cut will increase to £34bn or 23%.

Without further tax rises, the inevitable result will be a significant fall in the quality and quantity of services. But with the Tories seemingly determined to avoid these, another option rears its head: patient charges. At today's British Medical Association conference, that it is precisely what doctors will propose. Gordon Matthews, a member of the BMA consultants’ committee, will say: "A publicly funded and free-at-the-point-of- delivery NHS cannot afford all available diagnostics and treatments." Outlining the funding crisis that I've just described, he will add: "Everyone recognises that we’re in times of austerity, there isn’t a lot of money around, while public expectations have gone up and up, medical treatments have become more expensive and there isn’t an easy way to square the circle."

Matthew will propose drawing up a list of core services that will be provided for free, with charges introduced for others. If this seems heretical, it's worth remembering that our "free" health service hasn't been truly free since Labour chancellor Hugh Gaitskell introduced prescription charges for glasses and dentures in his 1951 Budget (although they have been abolished in Scotland, Wales and Northern Ireland). Morally speaking, there is no difference between these fees and co-payments. There is also growing public recognition that a high-quality NHS will need to be paid for. A recent Ipsos MORI poll for The King's Fund found that there is support for introducing charges for treatments that are not perceived as "clinically necessary" (such as cosmetic surgery and elective caesarean sections), for people thought to "misuse services" (e.g. missing appointments or arriving drunk at A&E), for patients requiring treatment as a result of "lifestyle choices" (e.g. smoking and obesity) and for 'top-ups' to non-clinical aspects of care (e.g. private rooms and other 'hotel' services). 

For now, the Tories insist that they will not go down this road. After Malcolm Grant, the chair of the NHS Commissioning Board warned last month that the next government would have to consider introducing "new charging systems" unless "the economy has picked up sufficiently", Jeremy Hunt told MPs: "Professor Malcolm Grant did not say that. What he actually said was that if the NHS considered charging, he would oppose it. I agree with him; I would oppose it, too." But just as pensioner benefits, once considered untouchable, are now being targeted by all parties for cuts, it seems increasingly unlikely that a "free NHS" will survive the age of austerity. 

Consultant Gynaecologist Ertan Saridogan gives Health Secretary Jeremy Hunt a demonstration of a laparoscopy system during a tour of University College Hospital. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Want to beat Theresa May? First, accept that she's popular

The difficult truth for the centre and left, and advocates of a new party, is that people don't "vote for the Tories reluctantly".

An election campaign that has been short on laughs has been livened up by a modest proposal by an immodest man: the barrister Jolyon Maugham, who used to write about tax for the New Statesman as well as advising Eds Miliband and Balls, has set out his (now mothballed) plans for a new party called Spring.

The original idea was a 28-day festival (each day would be celebrated with the national costumes, food and drink of one of the European Union’s member states) culiminating in the announcement of the candidacy of Spring’s first parliamentary candidate, one Jolyon Maugham, to stand against Theresa May in her constituency of Maidenhead. He has reluctantly abandoned the plan, because there isn’t the time between now and the election to turn it around.

There are many problems with the idea, but there is one paragraph in particular that leaps out:

“Like Sherlock Holmes and Moriarty, Labour’s left and moderates are bent on one another’s destruction. No one knows what the Lib Dems are for – other than the Lib Dems. And we vote for the Tories reluctantly, lacking an alternative.”

Even within this paragraph there are a number of problems. Say what you like about Sherlock Holmes and Moriarty but it seems hard to suggest that there is not a fairly large difference between the two – regardless of which one you think is which – that might perhaps be worth engaging with. There are fair criticisms of the Liberal Democrats’ uncertain start to this campaign but they have been pretty clear on their platform when they haven’t been playing defence on theological issues.

But the biggest problem is the last sentence: “We vote for the Tories reluctantly, lacking an alternative”. A couple of objections here: the first, I am not sure who the “we” are. Is it disgruntled former Labour members like Maugham who threw their toys out of the pram after Corbyn’s second successive leadership victory? If you are voting for the Tories reluctantly, I have invented a foolproof solution to “voting for the Tories reluctantly” that has worked in every election I’ve voted in so far: it’s to vote against the Tories.  (For what it’s worth, Maugham has said on Twitter that he will vote for the Liberal Democrats in his home constituency.)

I suspect, however, that the “we” Maugham is talking about are the voters. And actually, the difficult truth for the left and centre-left is that people are not voting for Theresa May “reluctantly”: they are doing it with great enthusiasm. They have bought the idea that she is a cautious operator and a safe pair of hands, however illusory that might be. They think that a big vote for the Tories increases the chance of a good Brexit deal, however unlikely that is.

There is not a large bloc of voters who are waiting for a barrister to turn up with a brass band playing Slovenian slow tunes in Maidenhead or anywhere in the country. At present, people are happy with Theresa May as Prime Minister. "Spring" is illustrative of a broader problem on much of the centre-left: they have a compelling diagnosis about what is wrong with Corbyn's leadership. They don't have a solution to any of Labour's problems that predate Corbyn, or have developed under him but not because of him, one of which is the emergence of a Tory leader who is popular and trusted. (David Cameron was trusted but unpopular, Boris Johnson is popular but distrusted.) 

Yes, Labour’s position would be a lot less perilous if they could either turn around Jeremy Corbyn’s popularity ratings or sub him out for a fresh, popular leader. That’s one essential ingredient of getting the Conservatives out of power. But the other, equally important element is understanding why Theresa May is popular – and how that popularity can be diminished and dissipated. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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