The truth is that Lansley’s NHS plan doesn’t go far enough

There was a dismal quality to the opposition day debate over NHS reform on 9 May, from the moment John Healey stood up to question the "unprecedented pause" in the bill - an oddly impotent phrase - to the attacks on the Lib Dems for being "up to their necks" in it, or the assertions about "clearing up Labour's mess". The last time I wrote about these reforms, in February, I ended with a warning to the Conservatives that the National Health Service is stronger than any government.

And so it has proved, with doctors and nurses' leaders apparently unanimous in their condemnation of Andrew Lansley's approach, the public alarmed as a result and the Health Secretary now subject to the humiliation of a special health advisory panel based in No 10. Lansley unwittingly revealed the crux of his presentational problem when he told the Commons: "We need this modernisation for the NHS because of the challenges it faces in the future. We need to deliver £20bn of efficiencies over the next four years." Much of the Health Secretary's problems have been these errors of presentation and timing; of moving too fast at a time when the health service is under immense financial pressure, and without pausing to get the health professionals onside first.

Red herring

It is true, as Stephen Dorrell, the highly respected former health secretary, has repeatedly stressed, that the Conservatives' NHS plans are evolutionary not revolutionary: they continue the revolution envisaged by Labour under Tony Blair. It was Blair's introduction of a limited element of private-sector provision within the NHS - still less than 3 per cent of all elective operations today - that paved the way for Lansley's approach. But there wasn't much support in Labour beyond Downing Street and Alan Milburn for the Blair reforms.

A lot of the opposition to Lansley's proposals is hyperbole about the principles of public service, privatisation and market forces. You cannot have a market where central government ultimately controls all the purse strings. In this sense, both main parties are rerunning the debates of the past. This bill is a red herring; it doesn't even begin to address the kinds of changes necessary to deliver health care in the UK in future decades, with an ageing, more informed and more demanding population asserting its right to the technologies of genetics and expensive new drugs.

Despite record levels of public satisfaction with the NHS, both David Cameron and Ed Miliband have stressed it is imperative that reform continue, but have not expressed clearly why. The answer to that "why" is hidden in the local election results, when the public failed decisively to reject the Conservatives' agenda of sharp spending cuts. This is the latest evidence that voters have reached a limit in how much they are prepared to continue to fund a universal system of public welfare at ever-increasing cost, which demands nothing from recipients in return, and with diminishingly obvious benefit in terms of social outcomes. This is the challenge confronting a Labour Party trying to find an agenda for the 21st century.

Recent elections in Britain and Germany have brought dismal results for social-democratic parties. Even in the Nordic countries, the challenges to the social-democratic welfare state model are clear. A report this month by the Organisation for Economic Co-operation and Development showed growing inequality in Sweden, Denmark and other Nordic nations, driven mainly by changes in the distribution of wages and salaries. In Sweden, the income ofthe bottom decile grew by 0.4 per cent a year on average between the mid-1980s and late 2000s, while the top decile had average growth of 2.4 per cent a year. Over that period, income inequality grew more in Finland and Sweden than it did in the US or the rest of Europe (albeit from a much lower base). "Countries such as Denmark, Germany and Sweden, which have traditionally had low inequality, are no longer spared from the rising inequality trend: in fact, inequality grew more in these three countries than anywhere else during the past decade," the OECD reported. Even in generous social-democratic states, welfare can no longer afford to iron out these things.

Free-for-all

In response to financial pressures, the Nordic countries have diversified their welfare arrange­ments, introducing user charges or non-state providers or internal markets. The dry, undergraduate social-policy textbook I am currently teaching ends its chapter on social democracy by questioning whether conventional social-democratic welfare policies will revive in more favourable economic circumstances; or whether the reluctance of social-democratic governments to challenge market imperatives "might be indicative of a growing realisation that there is now limited popular support for any party that sets out to challenge the rule of the market in a post-communist age".

From this perspective, concludes Robert Page, reader in democratic socialism at the University of Birmingham, "it is harder to refute the claim that social democracy, or at least that variant based on universal welfare, strong economic regulation and redistribution, is now in terminal decline". Discuss.

This is the debate that will have an impact on the provision of all welfare: benefits, health, education. Funding of university education has already breached the barrier. But MPs weren't discussing that in the health debate, because it would have implications for the NHS, including co-payments and user charges - a model more along French, Singaporean or Dutch lines than a universal free-for-all-for-everything. It may sound unpalatable, but that eventually will have to be the way forward. Just don't expect to hear it debated in the House of Commons.