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How the Pandemic Revealed the Real Health of Nations

Published by Anonymous (not verified) on Sat, 18/09/2021 - 9:42pm in

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UK, Healthcare, NHS

image/jpeg iconnhs-protest.jpg

As we noted in our last issue, a pandemic is as good as any event to demonstrate the efficacy, or not, of a social system. This one has generally found the capitalist mode of production wanting. By now most people will have forgotten the early failures.

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The National Insurance increase shows that levelling up has been consigned to the Conservative bonfire of easy promises

Boris Johnson playing Connect 4 with an elderly lady and a nurse whilst visit Westport Care Home in East London 7/9/21Picture by Andrew Parsons / No 10 Downing Street. Creative Commons 2.0 license

A country ruled by criminals needs two revolutions, one small and one big: The small revolution is to overthrow the criminal government, the big revolution is to radically undo the damage these criminals have inflicted on the country!

Mehmet Murat Ildan, Contemporary Turkish playwright, novelist, and thinker

 

This week, Boris Johnson announced that his government would not ‘duck the tough decisions needed to get NHS patients the treatment they need’, or ‘to fix our broken social care system’. After all the fanfare and promises, from an already morally bankrupt government, the reality is somewhat different. The proposed solution to increase National Insurance will not only do nothing to resolve the growing crisis in social care, or create a fairer system for social care provision, it will also create further burdens on an economy already creaking at the seams.

When Johnson refers to a ‘broken’ health and social care system, he is ignoring the elephant in the room. Who broke it? The actions of successive Conservative governments are to blame, through a decade of cuts that have deliberately starved the public sector of adequate funding, along with decades of allowing a private profit-seeking sector to benefit from public money, at the expense of those needing health or social care services. It did so as a result of its fixation with fiscal discipline and market-driven economic dogma.

The Covid-19 pandemic has exposed the folly of austerity, the toxic and harmful obsession with private sector involvement in the delivery of public services, and the consequences of the lack of strategic planning for such events, which have resulted in the NHS and social care struggling to function effectively during this crisis and led to unnecessary suffering and deaths.

Adding to the already existing shortage of nurses (over 40,000) and other health workers, insufficient ICU facilities, ventilators, beds and PPE, were the warning indicators that something was seriously wrong, as hospitals burst at the seams with very sick patients needing treatment. As a result, we are now facing a growing backlog of patients awaiting diagnosis or treatment (or who have even died waiting), with experts warning of the future consequences on staff already suffering from burnout, stress, and exhaustion. It is humanly unsustainable.

Social care services have not been immune from the same economic illiteracy. The warning signs preceded the pandemic. Social care is in meltdown now, and the proposal to increase National Insurance will not only fail to enable the fairer payment system for social care promised by the government, but it will also do little to alleviate the immediate problems caused by government policies.

Government officials have been clear that most of the money raised by the new tax will be spent on the NHS in the first three years, on the assumption that demand for state-funded care will increase from 2026, as people reach the spending cap. These proposals make no attempt to deal with an already failing underfunded system, and social care providers and charities have already indicated that the extra resources would not be sufficient to improve standards.

The problems faced by social care have been longstanding, exacerbated over decades by a mishmash of reforms by governments unwilling to grasp the nettle, as a likely result of the uncomfortable, but false, question of affordability and how it would be paid for. As a result, under an unfair means-tested social care system, which has for decades been served by private profit-seeking companies and charities relying on state funding to function, social care services have increasingly been impacted by years of funding cuts affecting local council budgets, putting increasing pressures on care standards, wages and employment terms and conditions, as private providers struggle to make their businesses profitable.

This is just pushing the problem yet again down the line, when social care can already no longer meet the needs of those requiring support. Recently published figures showed that nearly 300,000 people are on local authority waiting lists for adult social care, a situation which has arisen as a result of funding pressures and delayed assessments. Figures also reveal a chronic shortage of care workers which has meant that those requiring a home care package have had no option but to accept a ‘temporary’ placement in residential facilities.

The government’s decision to increase National Insurance, a regressive tax that will affect the poorest, not the richest, will lead to many of those already poorly paid workers losing substantial income, as figures now show. Coupled with the looming cuts to the universal credit uplift of £20 a week and rising energy and food prices, it will add more unnecessary pain and suffering to people’s lives. A study published this week by the Health Foundation has shown that the UC cut will hit areas with the worst health hardest and is likely to widen inequality in health and wellbeing, running counter to the government’s promised levelling-up commitment.

Analysis by Policy in Practice noted that by April 2022, the combination of the new Health and Social Care Levy and the removal of the uplift to Universal Credit would mean that carers would be £1035 per year worse off, despite the planned (but scarcely generous) increase to the National Living Wage. Its Director Deven Ghelani said: ‘The unfairness of paying for social care through a rise in national insurance, whilst cutting support for the lowest earners at the same time, means those that kept us going through the pandemic are the ones hardest hit.’

It isn’t any wonder that the media reported this week that many were already choosing to leave social care and find work elsewhere. When Amazon becomes a better alternative to working in social care and playing a vital role in society, then we should question our societal values. When we are told that affordability is key to public service provision, the cruel consequence must be that, down the line, people must suffer higher taxes to balance the budget. How can that even be a consideration for a government which is a currency issuer and has the power of the public purse?

Astonishingly, even the free-market Adam Smith Institute called these plans ‘morally bankrupt’, saying that the government was asking ‘poorer workers to bail out millionaire property owners.’ They also criticised the plan as a ‘kick in the teeth for all the young working people of this country who have already been hard done by the pandemic.’

Whilst the solution is simple, ditching the for-profit motive and replacing it with an adequately funded, publicly paid for, managed, and delivered social care system, getting politicians to agree is quite another matter. Obsessing over how it will be paid for, we have two extremes of economic nonsense being touted in the news and on social media. Both sides of the political spectrum are dedicated to raising taxes to pay for health and social care. The Tories, as these plans show, through punishing already poor people, and Labour by taxing the rich to raise revenue.

Quite rightly, one should tax the rich for reasons of equity and to strip away the power and influence their wealth brings them, but this week some left-wing progressive MPs have flogged the ‘taxing the rich’ to pay for social care narrative to death on social media. James Meadway, a former advisor to John McDonnell, also got in on the act saying that Labour should, ‘seize the opportunity to make the alternative funding case’. A wealth tax and other changes to tax arrangements would fit the bill, he suggested. At the same time, as his party came under pressure to set out a ‘costed plan’, the leader of the Labour Party, Keir Starmer, suggested that Labour would consider taxing wealth even more heavily to raise funds.

How depressingly predictable that the question of how you are going to pay for it is the standard response to funding public services, but the same question is never asked for bailing out banks or going to war.

Yes, of course, we want to see a more equitable society, but playing to Mrs Thatcher’s ‘There is no such thing as public money. There is only taxpayers’ money,’ assertion is a highly damaging tactic. When those supposedly on the progressive left associate themselves with an acolyte of the arch neoliberals Hayek and Friedman, it is scarcely an advert for confidence in them. Although the fact that such views are still underpinning policies and spending is not surprising, given the entrenchment of such narratives in political discourse. Playing to the understanding of one’s audience works every time.

What we need now, desperately, is an opposition which is prepared to put citizens before the profits of private companies and for politicians to reject the gibberish that the belief that taxes fund spending represents. It is hardly progressive to reinforce in the public mind the false household budget narratives of government spending; that tax rises will be necessary to fix what actually has been a deliberately broken health and social care system, or that they could be needed to keep the public accounts straight, as per Sunak’s coming ‘hard choices’ in the October Spending Review.

The insistence that there is no alternative to tax rises to pay for social care is both macroeconomically unsound and cruel to those who are already struggling to keep their heads above water. The consequences of higher taxes in these still uncertain times will be very hard on some of the poorest and most vulnerable in our society, and will do nothing to support the economy, businesses or the working population and their families, as the UC uplift is terminated, and energy and other costs rise. There still remains the looming potential crisis of rising unemployment as furlough ends, and even if there are sectors crying out for workers, there will likely be a mismatch in terms of skills requirements to fill new posts, and that will take time to correct.

In this respect, the government has put all its eggs into the free-market basket, expecting it to come up trumps, and it has failed, unsurprisingly. This government and decades of previous ones have trusted in the market to deliver. The invisible hand of the market, whatever that mythical beast is, has done no such thing. The private sector is a profit-seeking juggernaut which puts its own interests over public purpose. And therein lies the heart of the problem. Government has put fiscal discipline above people’s lives and allowed the private sector to run amok, in an unforgivable free-for-all bonanza of deregulation and profit-seeking.

The question is never, ‘is there enough money’ or ‘how will we pay for it?’ The question is do we have the real resources to deliver a better health and social care service, and if not, what are the solutions? That is the role of the government to plan and deliver through its spending and taxation policies. The government should be us, but now democracy is made a mockery, as government and corporations become one and the same thing, serving not the interests of the people or indeed the planet, but their own rapacious greed.

The price of a hands-off approach has been and will continue to be a heavy one. Government, as an elected body, should have a responsibility to serve its citizens to ensure fair and equitable wealth distribution, to create the vital public and social infrastructure upon which the economy depends, to plan for the future whether in a post Brexit era, for future pandemics, or indeed for a just green transition to deal with the climate emergency. Words and actions, however, like oil and water, don’t mix in Conservative terms. It has done none of those things, and now we have seen how easy it was for Conservative MPs in the Red Wall, who were originally objecting to the NI tax rise, to dutifully line up behind their macroeconomically challenged leaders to vote for more pain and suffering. Levelling up has been consigned to the Conservative bonfire of easy promises, and the people yet again duped into acceptance that there will be no alternative to tax rises, either to fund social care or balance the public accounts.

The failure of government hinges on a lie used to justify austerity. The lie of monetary scarcity. Over decades, despite the rhetoric and promises, the issue of social care has been swept under the carpet, and now the system is barely functioning. It will not be fixed by increasing taxes of any sort. It can only be fixed by a government with the political will to do so. Shamefully, successive governments have made a political choice not to fund it adequately. They invited the private sector in, as if social care or the NHS should be beholden to the god of business efficiency and profit, not public service for human well-being. The real cost has been lives, disaffected, poorly paid staff who are on the edge financially and physically.

We should be shouting it out loud. We have a government that chose this path. A government that chose to let social care collapse for the lie of fiscal discipline. What a terrible price we and our loved ones are paying. It didn’t and doesn’t have to be like this.

There are two potential outcomes: Either that we carry on with ‘business as usual’, as the work and pensions minister Baroness Stedman-Scott put it earlier this week to the House of Lords, referring to the removal of the UC uplift, or something else.

We could imagine a world where monetary reality informs government policies and spending decisions. Where government puts its citizens first. A world in which we could have a functioning public and social infrastructure, funded, managed and delivered publicly. An economy, underpinned by full employment and a Job Guarantee, that works for everyone, not just for an excessively wealthy elite that uses its power and influence to dominate public policy. A society where real resources and wealth are distributed more fairly, and a just transition to a green agenda to address the climate crisis looming close behind. Just imagine! The way may be rocky and uncertain, but if we don’t try, we will never know.

 

 

 

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The post The National Insurance increase shows that levelling up has been consigned to the Conservative bonfire of easy promises appeared first on The Gower Initiative for Modern Money Studies.

Yesterday’s tax plans were all about capturing tax revenues for private gain to the wealthy at cost to working people

Published by Anonymous (not verified) on Wed, 08/09/2021 - 5:07pm in

Given that much of yesterday’s Tory tax plan was well-trailed and had been subject to comment here beforehand there would seem little left to say on that issue now that the announcement has been made. Except, that is, to consider how it was announced and why it happened in that way, and the one unexpected element, which was an increase in the dividend tax rate by 1.25%.

Dealing with the latter first, this should be seen for what it is. It is a sop to criticism. It supposedly addresses the issue of national insurance avoidance by those who pay themselves using dividends from limited companies. I have no particular problem with tackling that issue, but there is a flaw. The implication is that genuine investment income - the dividends received in ISAs and by savings institutions, interest and rents - should all remain exempt from this charge. Implicit in this move was another attack on working people as a consequence, with the very obvious intention being that genuine wealth should be untouched by the demand that it contribute to society. The bias could not be clearer.

Then there is the way in which the announcement was made. It was deeply partisan. Rishi Sunak took much pleasure in announcing that he was imposing a tax on Scotland, Wales and Northern Ireland. It is apparent that they were not consulted.

The claim was that there was no alternative to raising tax was also wrong. As I noted yesterday, there is a substantial government underspend against budget already this year, whilst all deficits are being covered by the Bank of England quantitative easing as a matter of fact without inflation risk arising as a result, and so that claim was completely untrue.

As for there being no tax alternatives, that was also incorrect. I have shown that making NIC a more progressive tax could raise £14 billion a year, which is all that was required.

Capital gains tax could raise maybe £9 billion a year if rates were the same as income tax. The capital gains tax allowance could also have been reduced.

An investment income surcharge could raise maybe £7 billion a year.

And if the tax reliefs on pensions and gifts to charities were restricted to basic rate tax more than the required sum to supposedly meet this need could have been raised.

So, even using the Tory logic that tax funds spending (which is untrue) there were ample opportunities available. But they were not chosen. And that is indication of their true intention.

As I have noted this morning the most plausible interpretation of that intention is to capture yet more tax revenue for private gain. That must be the case because it is not clear that these tax increases were needed and in the case of social care at least it is not at all clear that there will be any on the ground impact arising from them. In that case it is entirely reasonable to look for the real motive for yesterday’s action and if one that is entirely consistent with their other actions in other areas can be found - and flooding wealth upwards has been the whole aim of the Johnson government - then it is reasonable to conclude that it reflects policy.

The regressive nature of the plans for social care and NHS funding are not, then, accident. They are by design. And that is what is so troubling about them. We have a government that in the middle of crisis is only concerned with the self-interest of a few. That’s becoming increasingly obvious. I just hope the electorate realise.

The Tories sold a social care con-trick yesterday that will do almost nothing to help those in real need

Published by Anonymous (not verified) on Wed, 08/09/2021 - 4:25pm in

Yesterday was an unusual day in UK politics. What the Tories recognised, albeit deeply reluctantly, was that the boundary between the state needed to be extended. Given changes in need, demographics and costs the direction in which they have been driving the economy for the last decade has been proven too be wrong. The ever shrinking state is not possible. They had to concede that their decade of cuts in social care had to be reversed. And that, in a very inadequate, unjust and partial way, is what they have begun to do.

I stress the point about the reversal of cuts. The additional spending announced yesterday does no more than restore some of the cuts in social care imposed during the last decade.

The spending on the NHS is recognition that the formulas used to claim that it has been ringfenced are wrong because healthcare inflation has been higher than general inflation rates due to the increasing complexity of care.

In that case this is not a generous settlement. It is instead a reversal of a trend in government spending that is long overdue.

That reversal reflects something I have suggested for some time, which is that when the private sector is both failing to innovate and is therefore finding it hard to stimulate demand from consumers for products that many do not really want the real capacity for new activity in the economy is in the state sector. Few doubt that people do want more healthcare, social care, education, justice, housing end environmental reform. The very tentative step towards rebalancing made yesterday is recognition of that.

That was the best thing I can find to say about yesterday’s announcement. That the Tories have been forced to recognise that the state not just has a role, but that it might need to be a bigger one is the good news.

The bad news is that they are still hopelessly unable to comprehend what that means in terms of funding and policy delivery.

I will discuss funding in another post. On policy delivery what was very apparent yesterday was that what was being delivered on social care was a tax increase on low paid workers so that the wealthy could retain more of the value of their properties to pass on to their children. That was the driving force behind this change. Everything else is a footnote to that goal. As policy priorities go few are as perverted in the face of need as that.

When it comes to practical delivery the statements made were even worse. Social care is largely delivered by local authorities. There was no indication of additional support being supplied to them. Nor was there any indication of how the social care sector might attract the staff needed to supply the services that are now so essential, including by providing funding for better pay. Nor was there a hint as to how the staffing crisis caused by Brexit is to be solved.

As bad is the detail of the proposal for individuals with care needs. The £86,000 cap on care costs is just for care. But when a person goes into care, which is when these costs usually accumulate, there are also accommodation and food costs to pay. They are not covered by the cap. The government thinks they come to no more than £10,000 a year - which is a little more than what they think a student in a hall of residence can live on a year. Those costs will not be capped. The chance that these costs are already higher, and will rise as pressure on costs in care homes increases, is significant. In that case the cap is not a cap at all. Sometime the backlash to that will kick in. As usual the Tories have sold a con-trick. Their MPs would be wise to note this today.

In summary then, this deal does not do what it says it will, and does nothing to solve the actual problem of care provision because the intention is that much of the value of the spend will be captured for private gain by those with wealth. There is a need for better funding for the NHS and social care. That is beyond dispute. But even before the flaws in the tax choices made are considered this plan is not the way to deliver that change, largely because that is not its real intention. The consequence is that on the ground nothing of consequence will change. And that is what really matters. Redrawing the boundary between the state and private sectors to increase private wealth is not a policy at all, built is instead another raid by the well off on the public purse. And it is those that have to end.

Social Care – or not

Published by Anonymous (not verified) on Wed, 08/09/2021 - 6:51am in

The announced ‘solution’ to the care crisis really couldn’t be any worse. National Insurance (NI) with its start at a rate lower than income tax and a rate on the highest income of nil is demonstrably regressive. The fact that companies and employers will have to pay this NI as well and just after a... Read more

The government has borrowed £26 billion less this financial year than it forecast in March. So what is the £10 billion NIC increase all about?

Published by Anonymous (not verified) on Tue, 07/09/2021 - 8:08pm in

Government 'borrowing' (or money creation as I would prefer to think of it) from April to July this year amounted to £78 billion against an estimate published in March 0f £104 billion, as this chart from the Office for National Statistics shows:

Thye planned £104 billion was apparently sustainable. That's hardly surprising: the deficit was covered by the Bank of England quantitative easing programme and did not really increase national debt at all in that case.

The actual borrowing is £26 billion less than that.

But we apparently require £10 billion if the NHS is going to have the funding it needs.

As is readily apparent, there is no need for that £10 billion tax increase. It is simply, not required. The cost of the NHS funding can be absorbed within existing budgets without detriment arising.

So what is this all about?

Sunak’s class warfare – in the Mirror

Published by Anonymous (not verified) on Sat, 04/09/2021 - 5:04pm in

My argument that national insurance should not be used to fund inreased spending on social care made it to The Mirrior this morning:

You can read it here.

Opting out of what you regulate and run…

Published by Anonymous (not verified) on Wed, 01/09/2021 - 6:11am in

A brief and probably, random thought – shouldn’t an incoming progressive government make it illegal for MP’s themselves to use either private healthcare or private education? Initially at least, I cannot see much wrong with that – provided that we get such a government… That would have the effect of encouraging those who wanted to... Read more

The rise in Covid cases makes this not just a worrying but also a dangerous time

Published by Anonymous (not verified) on Tue, 31/08/2021 - 4:31pm in

I wish I could share the optimism of many I saw out and about - and deliberately choosing to socialise in places with poor ventilation -yesterday as cool descended on a late August bank holiday, but I don’t.

My concern is evidence based. Take this tweet as providing some of that evidence. Dr Deepti Gursdasani is now, with Prof Christina Pagel, one of the best commentators on Covid issues, most especially since Prof Devi Sridhar seems to have become strangely compliant with the government’s line of late:

That spike in cases is not by chance: it is undoubtedly related to school reopening. It is almost inevitable that the same trend will be seen in England and Wales very soon.

I am, of course, aware that the connection between cases and hospitalisations has changed, and that double vaccination is clearly helping many avoid serious illness. I don’t need to be told that. But case rates and hospitalisations are rising across all age ranges in Scotland now. And we face a case load 26 times heavier this end of August to that which we had a year ago. The result is that we do face the risk of NHS chaos this autumn, and the chance that we will avoid lockdowns again seems to be low to me.

In that case economic recovery looks very unlikely. The optimistic forecasts from the likes of the Bank of England  from earlier this year look to be very far removed from reality now.

The real question is, in the midst of all this evidence that not much has really changed, what will the government do? Is furlough really going to end? Is austerity likely? And is Sunak’s threat to de-fund the NHS really going to happen? All of these look like acts of recklessness right now. But that seems to be the Tory way at present. And that makes this not just a worrying, but also a dangerous time.

Sunak’s approach to NHS funding is completely wrong because it harms wellbeing

Published by Anonymous (not verified) on Sun, 29/08/2021 - 7:33pm in

I posted this Twitter thread last night:

A slightly blown-up version of the Telegraph story to which I refer looks like this:

The nub of it is simple: in the face of massive underfunding and an ongoing Covid pandemic Sunak is seeking to provide no further additional funding for the NHS despite the very obvious need for it.

Let me try the four questions on any economic policy that I suggested appropriate this morning, and apply them to Sunak and the financial elite that he represents:

1. Do I know what might improve the wellbeing of others?
2. Might what is proposed improve that wellbeing?
3. Would the proposed activity cause others to have a reasonable concern as to my wellbeing?
4. Can the proposed activity, in the light of these answers, be justified?

The answers are:

  1. Yes, we know more medical care will improve the wellbeing of others, and that it is urgently required;
  2. What is proposed will not improve that wellbeing;
  3. What is proposed will not threaten the wellbeing of the financial elite since they can afford all the financial care that they desire;
  4. In the light of this the proposed action cannot be justified.

I'd suggest that the methodology works.

And that Sunak is completely wrong in his approach.

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