Thursday 4 October 2012

What does One Nation Labour mean for the NHS?

Mr Miliband clearly criticises the role of the market in healthcare. So if Labour are serious about "rolling back the market"' they need some serious movement away from their New Labour days, which were dominated by the use of markets in public services. This was summarised very well by former Labour cabinet minister John Denham MP in an
article in the Chartist, 2006:
“All public services have to be based on a diversity of independent providers who compete for business in a market governed by consumer choice. All across Whitehall, any policy option now has to be dressed up as “choice”, “diversity”, and “contestablity”. These are the hallmarks of the “new model public service”

In terms of the NHS, New Labour expanded Thatcher's internal market with their own souped up version, using the mutually reinforcing market policies of patient choice, competition between a plurality of Any Willing Provider (AWP), and payment by results (PbR).

The politics of Labour's transformation to New Labour and it’s obsession with markets is very interesting and I have written about it (in relation to NHS changes) in more detail
here in a paper presented at the International Association of Health Policy in Europe conference in 2009. However, it was summed up brilliantly in one paragraph by 2 Labour MPs, Jon Cruddas and Jon Trickett in the New Statesman in 2007:
"After years in opposition and with the political and economic dominance of neoliberalism, New Labour essentially raised the white flag and inverted the principle of social democracy. Society was no longer to be master of the market, but its servant. Labour was to offer a more humane version of Thatcherism, in that the state would be actively used to help people survive as individuals in the global economy - but economic interests would always call all the shots"

Tony Blair also explained the realities that Labour faced in a speech to the Chicago stock exchange in 2004:

"Every day, £1 trillion is traded in the foreign exchange markets in the City of London. Any Government that thinks it can go it alone is wrong. If the markets don't like your policies they will punish you".

So what policies do the markets demand? In summary, they demand neoliberal policies and this means:
1. Freeing up markets with further deregulation:
I was under, and Britain was under, relentless pressure from the City that we were over-regulating. All through the 10 to 15 years, the battle was not that we regulated too little, but that we regulated too much.”  Gordon Brown, Telegraph 2011
2. “Rolling back the state”.  Golden rules for public sector borrowing, keeping spending off balance sheets, PFI/PPPs and marketisation and privatisation of public services.
3. Supply side economic policies. Low tax, low inflation economies with central bank independence
4. Use of private sector management practices in public sector
5. TINA – “There is no alternative”. Do as the markets say, or be at the mercy of “Capital flight”

The global financial collapse has since changed attitudes towards the neoliberal doctrine, which can be summed up by Newsnight’s BBC Economics editor, Paul Mason, who wrote in his book Meltdown. The End of the Age of Greed :

"A deregulated banking system brought the entire economy of the world to the brink of collapse. It was the product of giant hubris and the untrammelled power of the financial elite.....Basically neoliberalism is over: as an ideology, as an economic model. Get over it and move on. The task of working out what comes after it is urgent . Those who want to impose social justice and sustainability on globalised capitalism have a once-in-a-century chance"

This is probably why Labour is changing its tune and becoming One Nation Labour. It is trying to regain the soul it lost during the Blair years. However, Labour still faces the same problem that Tony Blair highlighted in his Chicago speech in 2004, except that it is now $3trillion dollars that are traded in foreign exchange markets every day in the City of London!

I believe that this is why Labour is being very cautious about its policies. In terms of the NHS, they seem muddled. They want to get rid of the market, but leave market structures in place. This makes no sense at all and they need to be pushed on this. If you don’t support markets in healthcare then it is clear that the purchaser provider split needs to be abolished. Yet Andy Burnham is talking about “whole person” tariffs, which smacks of retention of the PP split and use of a more managed market. This is all in keeping with Professor Colin Crouch’s arguments about the “Strange Non-Death of Neoliberalism”

In summary, I would rather have a National Health Service than a One Nation Health service. Having said that, it is clear that the Labour party are the only party capable of saving of the NHS. They just need a good push in the right direction.