Protesters from the National Health Action Party lead a mock funeral procession for the NHS along Whitehall. Photograph: Getty Images.
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The NHS funding crisis is now impossible to ignore - which party will grip it?

Without new money, the health service will be condemned to years of dangerous decline. 

After four years of austerity, the NHS funding crisis is becoming impossible for the government to disguise. More than one in three trusts (58) are now running a deficit, compared to just one in ten (16) before the coalition entered office. Meanwhile, the BBC reports today that health service faces a funding gap of up to £2bn next year as its budget is burst by rising demand. 

All of this was entirely predictable. Contrary to the conventional view that it has been shielded from austerity, the NHS is currently enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the current parliament it will rise by an average of just 0.5 per cent. Consequently, 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-terms settlements for the three years from 2015-16, this cut will increase to £34bn or 23 per cent.

If the health service, the most popular spending area among the public (71 per cent believe that its budget should be increased and just 5 per cent that it should be reduced) is to survive in anything like its present form, the question of new funding can no longer be deferred. Jeremy Hunt is involved in talks on additional funding for the next financial year (potentially to be announced in George Osborne's pre-election Budget) but this will only be a sticking-plaster solution at best. 

If they wish to avoid a significant fall in the quality and quantity of services, this government and future ones are left with three choices: to significantly raise taxes, to cut spending elsewhere, or to impose patient charges. The third of these is proposed today by the Royal College of Nursing, which calls for a £10 fee for patients to see their GP. 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 now been abolished in Scotland, Wales and Northern Ireland). But unsurprisingly, the Department of Health has responded by dismissing the idea out of hand: "We are absolutely clear that the NHS should be free at the point of use, and we will not charge for GP appointments." Labour, needless to say, takes the same view. 

The most concrete suggestion on how to solve the crisis has come from Labour's Frank Field, who has called for a 1 per cent rise in National Insurance, comparable to that introducd by Gordon Brown in 2002, with the additional funds put into a dedicated fund that would be run as a mutual. But after spending much of the last year warning of a "cost-of-living-crisis", senior Labour figures, most notably Ed Balls, are doubtful that the party can afford to go into the general election pledging to raise general taxation. In an attempt to start a political bidding war, I'm told by Field that he will shortly meet with Hunt to try and sell the idea to the Tories. But all the signs are that David Cameron and George Osborne intend to run a classic 1992-style campaign in which they pledge to clear the remainder of the deficit through spending cuts alone and denounce Labour's "tax bombshell". 

But unless the parties are soon willing to confront voters with the truth that if they want the NHS to survive, they will have to pay for it (that is to say, they cannot enjoy Nordic-style services on US-style tax rates), the health service, rated by a new US study as the best in the world, will be condemned to years of dangerous decline. 

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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The Fire Brigades Union reaffiliates to Labour - what does it mean?

Any union rejoining Labour will be welcomed by most in the party - but the impact on the party's internal politics will be smaller than you think.

The Fire Brigades Union (FBU) has voted to reaffiliate to the Labour party, in what is seen as a boost to Jeremy Corbyn. What does it mean for Labour’s internal politics?

Firstly, technically, the FBU has never affliated before as they are notionally part of the civil service - however, following the firefighters' strike in 2004, they decisively broke with Labour.

The main impact will be felt on the floor of Labour party conference. Although the FBU’s membership – at around 38,000 – is too small to have a material effect on the outcome of votes themselves, it will change the tenor of the motions put before party conference.

The FBU’s leadership is not only to the left of most unions in the Trades Union Congress (TUC), it is more inclined to bring motions relating to foreign affairs than other unions with similar politics (it is more internationalist in focus than, say, the PCS, another union that may affiliate due to Corbyn’s leadership). Motions on Israel/Palestine, the nuclear deterrent, and other issues, will find more support from FBU delegates than it has from other affiliated trade unions.

In terms of the balance of power between the affiliated unions themselves, the FBU’s re-entry into Labour politics is unlikely to be much of a gamechanger. Trade union positions, elected by trade union delegates at conference, are unlikely to be moved leftwards by the reaffiliation of the FBU. Unite, the GMB, Unison and Usdaw are all large enough to all-but-guarantee themselves a seat around the NEC. Community, a small centrist union, has already lost its place on the NEC in favour of the bakers’ union, which is more aligned to Tom Watson than Jeremy Corbyn.

Matt Wrack, the FBU’s General Secretary, will be a genuine ally to Corbyn and John McDonnell. Len McCluskey and Dave Prentis were both bounced into endorsing Corbyn by their executives and did so less than wholeheartedly. Tim Roache, the newly-elected General Secretary of the GMB, has publicly supported Corbyn but is seen as a more moderate voice at the TUC. Only Dave Ward of the Communication Workers’ Union, who lent staff and resources to both Corbyn’s campaign team and to the parliamentary staff of Corbyn and McDonnell, is truly on side.

The impact of reaffiliation may be felt more keenly in local parties. The FBU’s membership looks small in real terms compared Unite and Unison have memberships of over a million, while the GMB and Usdaw are around the half-a-million mark, but is much more impressive when you consider that there are just 48,000 firefighters in Britain. This may make them more likely to participate in internal elections than other affiliated trade unionists, just 60,000 of whom voted in the Labour leadership election in 2015. However, it is worth noting that it is statistically unlikely most firefighters are Corbynites - those that are will mostly have already joined themselves. The affiliation, while a morale boost for many in the Labour party, is unlikely to prove as significant to the direction of the party as the outcome of Unison’s general secretary election or the struggle for power at the top of Unite in 2018. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.