Why the debate over NHS charges won't go away

The looming funding crisis means that a third of GPs now support patient charges, with the number only likely to increase.

During last week's debate over the introduction of new NHS charges for migrants, few noted one salient point: that the introduction of payments for some patients (and the creation of an accompanying infrastructure) makes the eventual introduction of payments for all patients more likely. Just a few days on, that issue has risen again after a poll of 800 GPs found that 32% support charging patients for A&E visits in order to reduce unnecessary attendances. The public would be required to pay £5-£10 each time they use the service and would have the money refunded if their condition was shown to need attention. One doctor says: "Charging even a nominal fee of about £10 for each ­­attendance will probably cut the attendances by half", while another comments: "If patients had to pay a £5 charge to attend A&E – that could be refunded for appropriate attendances – they would be more inclined to take their coughs to the pharmacist where they belong."

Both the government and Labour have given the idea short shrift today. The Department of Health said that "charging patients goes against the founding ­principles of the NHS" and shadow public health minister Luciana Berger said: "Forcing patients to pay at the door of A&E is not the way to end David Cameron's crisis. Under this government, it's become harder to get a GP appointment after Ministers took away the support for evening and weekend opening in 2010. They must help patients see their family doctor and stop the closure of NHS Walk-in Centres to reduce the pressure on A&E. A staggering number of GPs can see that Jeremy Hunt's plan to keep older patients away from A&E will have little effect. He and David Cameron must bring forward realistic plans to tackle the crisis they've caused."

The proposal is also opposed by the Royal College of GPs, the British Medical Association and the Patients Association. The RCGP’s Dr Helen ­Stokes-Lampard said: "It would put us on the ­slippery slope to the Americanisation of ­care, where only those who can afford it get it." But for several reasons, the debate over NHS charges is unlikely to end here.

At present, despite the common view that it has been shielded from austerity (expressed by Liam Fox yesterday), the NHS is experiencing the toughest spending settlement in its history. 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 a recent Social Market Foundation paper, 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%.

If they wish to avoid a significant fall in the quality of the health service, this government and future ones are left with three choices: to raise taxes (my preference), to cut spending elsewhere, or to impose patient charges. With all parties, and the Tories in particular, keen to avoid any major tax rises, and other services already enduring unsustainable cuts, the option of charges is likely to attract the support of an increasing proportion of doctors and Conservative MPs.

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 since 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 year 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 should not be assumed that a "free NHS" will survive the age of austerity. 

Health Secretary Jeremy Hunt delivers a speech during his visit with David Cameron to the Evelina London Children's Hospital on July 5, 2013. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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We are heading for the next recession – it's crucial the right people are in charge

There is grave economic trouble ahead, and if the Tory right are in power, the consequences could be ghastly.

Well, we were warned. The governor of the Bank of England and the IMF, as well as much of the financial community, were very clear that Brexit would produce a damaging economic shock. It is happening.

Even if we discount George Osborne’s absurd and counterproductive attempts to predict the precise fall in house prices and threaten a deflationary emergency budget, there were sensible and dispassionate warnings of severe trouble ahead. We now need to think through how progressive opponents of this government should respond.

My starting point is a disagreement with my Tory former colleagues in the coalition – from both Remain and Leave – who argue that Britain has a “fundamentally strong economy”. It doesn’t. We have barely recovered from the 2008 crisis, are still on the life-support system of artificially cheap money and have a horribly unbalanced economy. Recovery was happening but fragile.

The first stage in the post-Brexit shock is the predictable turbulence in financial markets as liquid investors jump into safer assets and away from riskier holdings of sterling, UK banks and other shares. This is a very different situation from 2008, which was a financial crisis to which politicians had to respond; this is a political crisis, a huge escalation of political risk, to which markets are responding.

The fall in sterling should not exercise us too much. If devaluation is locked in, it would help rebalancing. The Monetary Policy Committee will surely be sensible and disregard the short-term inflationary consequences, as members did the spike in commodity prices five years ago. If investors move out of UK residential property and precipitate a sustained fall in house prices, that is also to be welcomed. The main casualties of the immediate turbulence are Brexit-voting pensioners whose annuity values crashed with the flight into gilts.

The gravest potential short-term risk was anticipated by the Bank of England when it pumped in £250bn to prevent a drying up of liquidity in the banking system and another credit crunch. The prompt action has clearly reassured markets. However, what may be more serious is the gradual reassessment of risk by bank credit committees leading to restrictions on lending to smaller businesses. That would be disastrous for growth. A pragmatic government should reach for some of the tools created by the coalition, such as the British Business Bank, for sources of business credit.

In the second stage the crisis will migrate from asset markets to the real economy and jobs. The new Tory leader will be praying the time before unemployment kicks in will be long enough to have a general election. By autumn, we shall have a clearer picture of the scale of any slowdown, but I find it difficult to see how we can avert a Brexit recession.

The issue is how to deal with a recession. Monetary stimuli are losing effectiveness. With interest rates close to zero, there isn’t much scope for further cuts and quantitative easing is becoming increasingly problematic. Some in the City will be urging more cuts, worried about Osborne’s plan to eliminate government borrowing by 2019.

There was never a better time for public investment to fill the gap in demand left by private investors. There is a long pipeline of coalition infrastructure projects, including Network Rail’s stalled investment plan, to get on with. But then we encounter the Treasury’s pathological aversion to borrowing to invest. Its deep conservative instincts will be reinforced by our deteriorating credit rating.

Yet the need to confront the structure and balance of the economy transcends the issues of short-term crisis and medium-term macroeconomic management. The financial sector may well take a bad hit with banks migrating to European centres. We should not minimise the costs to individuals and the Exchequer, but it may be no bad thing if the result is some rebalancing. The industrial strategy put in place under the coalition is an ideal vehicle for building confidence in long-term investment in manufacturing and creative industry. Of course, none of this will happen without a speedy confirmation of the UK’s continued role within the single market.

How the economics of this political crisis will be dealt with depends on the parliament that is returned when a new Tory leader calls an election. If the Tory right emerges triumphant, the consequences will be ghastly. If the parties of the centre and left – including disaffected Tory Remainers – can get themselves organised, however, we could see an altogether happier outcome.

This article first appeared in the 30 June 2016 issue of the New Statesman, The Brexit lies