visible views

Public service pensions, NHS and 'radical' solutions

There have been a spate of articles in newspapers, 'documentaries' on TV etc all about the problems facing the NHS. There was one last night, very well put together and cogently argued, based on the Queen Elizabeth and Selly Oak Hospitals in Birmingham. Last week there was a three page spread in the Daily Mail all about NHS problems. I'm always suspicious when I see that sort of thing. I know how the public relations business works and I see the hand of the government PR machine at work, creating the impression of an impending crisis that requires 'radical' solutions. They did it over Iraq, as we all know. They are doing it at the moment over pensions, especially public service pensions, and they've obviously got a plan in mind for the NHS. They think that privatising everything is the answer. They are more Tory than the Tories!

The basic argument is that with a population that is increasingly growing top heavy with non-productive elderly people, who are living and collecting pensions for longer, and a workforce that is getting smaller, because people aren't having so many children, there will be too few working people paying taxes to support the future costs of healthcare and the basic state pension. This is all made worse by the extra burden of healthcare caused by elderly people who want to be kept alive, and the cost of advanced drugs and diagnostic techniques like PET scans at £500 a time!

Sounds simple doesn't it? All very matter of fact and logical. However, the conclusions that one chooses to draw can be very different depending on one's viewpoint. If you are a businessman who is trying to maximise profit for shareholders and high salaries and benefits for fat-cat directors, you might take the view that low taxation is preferable to high taxation with health care and pensions paid for by everyone out of income. On the other hand, if you believe in a social market approach, you will accept that some things are better delivered by the state, either alone or in partnership with providers, and paid for by some form of taxation to ensure equal access and universal provision.

But you can do anything with figures and the truth is that how much the NHS, or the basic rate old-age pension, will cost in real terms, compared with now, depends on a wide variety of different factors. A few less stupid military adventures in different parts of the world and we'll have saved a large part of the money needed. And who's to say that people wouldn't be willing to pay more in tax to see the kind of society that provides enhanced healthcare and pensions for all that need them? America, France, Germany and Denmark all have better healthcare than we do, and pay more for it. We've had the NHS on the cheap for too long, largely because of the selfless work of unsung thousands who put in overtime without getting paid for it and who put up with low pay too. Most of the problems that bedevil the NHS today are due to under-investment. It's not too long since I used to read that hospitals were sacking cleaners to help balance the books - and what have we got now? The highest rates of MRSA ever!

Gordon Brown has been remarkably effective at increasing the tax take without raising the basic rate of income tax. His tax on pension funds has caused great damage to the pension funds of millions of ordinary investors and new accounting rules on the liquidity of pension funds have been instrumental in depriving some workers of their paid-for superannuated pensions altogether, due to firms that have gone into receivership because they can't finance the extra amounts to restore value to funds whose nominal value has been depressed by current low share prices - a completely artificial problem that has played havoc with pension funds operated by firms. My view is that we are wealthy enough as a nation to afford proper levels of basic state pension for old people and that the healthcare burden is still best delivered by a properly-funded NHS. Whether we will stay wealthy depends on whether we can rebuild our manufacturing industries. We make less and less. The next body blow will be the demise of Rover Cars, the last remnant of British-owned car manufacturing in Birmingham, which is about to be sold to the Chinese (if they want it). We can't sustain the wealth of the nation simply by being good at buying and selling money itself, or insuring the world through Lloyds. In an electronic age, people can buy shares, insurance, foreign exchange etc in seconds over the Internet. So it only a matter of time before we lose our dominance in the so-called 'invisibles'. We really will wish we had something to sell that the world wants when that revolution happens.

posted by longfuse @ 10:40 pm