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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The Autumn Statement proved it – we need a real alternative to austerity, now

Theresa May’s Tories have missed their chance to rescue the British economy.

After six wasted years of failed Conservative austerity measures, Philip Hammond had the opportunity last month in the Autumn Statement to change course and put in place the economic policies that would deliver greater prosperity, and make sure it was fairly shared.

Instead, he chose to continue with cuts to public services and in-work benefits while failing to deliver the scale of investment needed to secure future prosperity. The sense of betrayal is palpable.

The headline figures are grim. An analysis by the Institute for Fiscal Studies shows that real wages will not recover their 2008 levels even after 2020. The Tories are overseeing a lost decade in earnings that is, in the words Paul Johnson, the director of the IFS, “dreadful” and unprecedented in modern British history.

Meanwhile, the Treasury’s own analysis shows the cuts falling hardest on the poorest 30 per cent of the population. The Office for Budget Responsibility has reported that it expects a £122bn worsening in the public finances over the next five years. Of this, less than half – £59bn – is due to the Tories’ shambolic handling of Brexit. Most of the rest is thanks to their mishandling of the domestic economy.

 

Time to invest

The Tories may think that those people who are “just about managing” are an electoral demographic, but for Labour they are our friends, neighbours and the people we represent. People in all walks of life needed something better from this government, but the Autumn Statement was a betrayal of the hopes that they tried to raise beforehand.

Because the Tories cut when they should have invested, we now have a fundamentally weak economy that is unprepared for the challenges of Brexit. Low investment has meant that instead of installing new machinery, or building the new infrastructure that would support productive high-wage jobs, we have an economy that is more and more dependent on low-productivity, low-paid work. Every hour worked in the US, Germany or France produces on average a third more than an hour of work here.

Labour has different priorities. We will deliver the necessary investment in infrastructure and research funding, and back it up with an industrial strategy that can sustain well-paid, secure jobs in the industries of the future such as renewables. We will fight for Britain’s continued tariff-free access to the single market. We will reverse the tax giveaways to the mega-rich and the giant companies, instead using the money to make sure the NHS and our education system are properly funded. In 2020 we will introduce a real living wage, expected to be £10 an hour, to make sure every job pays a wage you can actually live on. And we will rebuild and transform our economy so no one and no community is left behind.

 

May’s missing alternative

This week, the Bank of England governor, Mark Carney, gave an important speech in which he hit the proverbial nail on the head. He was completely right to point out that societies need to redistribute the gains from trade and technology, and to educate and empower their citizens. We are going through a lost decade of earnings growth, as Carney highlights, and the crisis of productivity will not be solved without major government investment, backed up by an industrial strategy that can deliver growth.

Labour in government is committed to tackling the challenges of rising inequality, low wage growth, and driving up Britain’s productivity growth. But it is becoming clearer each day since Theresa May became Prime Minister that she, like her predecessor, has no credible solutions to the challenges our economy faces.

 

Crisis in Italy

The Italian people have decisively rejected the changes to their constitution proposed by Prime Minister Matteo Renzi, with nearly 60 per cent voting No. The Italian economy has not grown for close to two decades. A succession of governments has attempted to introduce free-market policies, including slashing pensions and undermining rights at work, but these have had little impact.

Renzi wanted extra powers to push through more free-market reforms, but he has now resigned after encountering opposition from across the Italian political spectrum. The absence of growth has left Italian banks with €360bn of loans that are not being repaid. Usually, these debts would be written off, but Italian banks lack the reserves to be able to absorb the losses. They need outside assistance to survive.

 

Bail in or bail out

The oldest bank in the world, Monte dei Paschi di Siena, needs €5bn before the end of the year if it is to avoid collapse. Renzi had arranged a financing deal but this is now under threat. Under new EU rules, governments are not allowed to bail out banks, like in the 2008 crisis. This is intended to protect taxpayers. Instead, bank investors are supposed to take a loss through a “bail-in”.

Unusually, however, Italian bank investors are not only big financial institutions such as insurance companies, but ordinary households. One-third of all Italian bank bonds are held by households, so a bail-in would hit them hard. And should Italy’s banks fail, the danger is that investors will pull money out of banks across Europe, causing further failures. British banks have been reducing their investments in Italy, but concerned UK regulators have asked recently for details of their exposure.

John McDonnell is the shadow chancellor


John McDonnell is Labour MP for Hayes and Harlington and has been shadow chancellor since September 2015. 

This article first appeared in the 08 December 2016 issue of the New Statesman, Brexit to Trump