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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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.