26 October 2010

An article courtesy of red pepper

Dismantling the NHS

Behind the technicalities, what do the government’s plans for the NHS really mean? Stewart Player and Colin Leys expose the reality of the health service white paper

The coalition government’s plans for the NHS represent the final conversion of healthcare into something to be bought, with really good care going to those who can pay for it and only a defined ‘package’ of free treatments, of declining quality, for everyone else.

What has already occurred with dentistry, physiotherapy, podiatry and other services will start happening across the board. ‘Top-ups’ and ‘co-payments’ will become standard. Some treatments will cease to be available freely on the NHS and have to be paid for – if you can afford it.

It’s already happening all over England, as staff and services are cut to meet the government’s demand for £20 billion ‘savings’ over the next five years. GPs are being told to refer many fewer patients to specialists.

NHS North London has decided to cut back on cataracts and hip and knee replacements. The government’s plans mean that this will become the norm, not just one-off cuts justified as a response to a crisis. Under the new plans, by 2014 NHS hospitals will no longer be answerable to the taxpayers who have paid for them over the years, and will no longer have the overriding aim of providing the best possible healthcare for the their local community.

By then they will all be businesses, competing with private hospitals and clinics for NHS patient income. To stay afloat financially they will have to cut costs, reduce staff, lower the ‘skill mix’, reduce levels of pay, focus on profitable treatments and neglect or even abandon high-cost and unrewarding ones in order to match the for-profit sector. There will also be many fewer of them.

The aim is to take chronic care out of hospitals and deal with it in non-hospital settings – ‘super-surgeries’ or clinics, largely owned and run by private companies. It will be a healthcare market, very like that in the US.


All hospitals, public and private, will be answerable only to the central regulator, Monitor, which is concerned only to ensure that they stay solvent and behave competitively.

They will be supervised for safety and quality by the Care Quality Commission, but the CQC is notoriously feeble: it gave mid-Staffordshire top marks when several hundred patients had been dying there from neglect.

The white paper says the CQC will become more demanding. But if in future it tells a hospital to raise its standards, and the finance director replies that the required improvements are unaffordable, what is supposed to happen? There will be no ‘bailouts’. The government’s view is that the hospital should either cut some services, or even close altogether, leaving patients to be treated by ‘better’, privately-owned hospitals – or perhaps in the same hospital, after it has been taken over by a private company.

That is the logic of the healthcare market the white paper envisages.

But closing a medical department or even a whole hospital isn’t like closing a department in a department store, or the store as a whole. There are rarely adequate alternative facilities within reach. Letting hospitals fail means chaos, anxiety and serious risks for patients and their families.

And what if the private company’s services turn out to be no better? The quality record of the privately-owned Independent Sector Treatment Centres (ISTCs), set up and subsidised at huge public expense by Alan Milburn during his time as health minister to treat NHS-funded patients, is notoriously worse than that of NHS hospitals doing similar work.

Whether it is healthcare or home care or schools, good public services for all must come in the end from a service ethic on the part of staff who are not in it for the money, and management who are not in it for shareholders (or forced to compete with companies that are run for shareholders). Outside regulation has a part to play, but without the core commitment that comes from being part of a national service that expresses the solidarity of society – in the case of health, the solidarity of all the well with all the sick – equally good services for everyone will soon be a thing of the past.


The proposed change that has attracted most attention is the shift of commissioning from Primary Care Trusts (PCTs) to ‘local consortia of GP practices’. This is being done on the grounds that ‘primary care professionals’ are best placed to know what is best for patients, and will engage in ‘more effective dialogue and partnership with hospital specialists’. Who could object to that?

You do wonder why PCTs haven’t previously been told to organise such a dialogue between GPs and specialists; but the more important point is that GPs can’t in fact do commissioning.

‘Commissioning’ is Department of Health-speak for purchasing, and what it means in practice is setting the terms of what exactly will be paid for: what services will be covered, how they will be delivered, by clinicians with what sorts of qualifications, following what protocols, with what limits on length of stay in hospital, prescribing what drugs and rehabilitation programmes, and so on. These so-called ‘care pathways’ are at the heart of commissioning, or buying healthcare. The payments are per-patient, at pre-agreed prices for each kind of treatment package.

And to ensure that the deal pays off, any variation from the agreed protocols must be cleared with the commissioner or purchaser. This is the meaning of the ‘managed care’ operated by America’s notorious HMOs (health maintenance organisations), in which doctors have to plead with the HMO to be allowed to go ahead with a needed treatment that the HMO says is unnecessary, in reality because it will cost more than the HMO wants to pay.

Viewers of Michael Moore’s film Sicko will remember a doctor who used to work for an HMO telling a congressional committee how she was paid a bonus according to how often she denied treatments to patients. The new ‘GP consortia’ may not go so far as to reward their staff on this basis. But they will have limited budgets, and the way they are supposed to reduce costs is precisely to involve themselves in the details of all the treatments they are going to pay for. Someone will have the job of denying something.

Two big deceptions

1 Who will really run the new GP consortia?

Some GPs are said to be keen to take on commissioning. But the work involved is essentially commercial, not medical. The new consortia will have to employ large teams of administrators, lawyers and others to negotiate, make contracts, monitor performance, send out bills, do audits, deal with disputes, and so on – as PCTs are already doing.

That is the first big deception involved in this change. It sounds as if GPs will be doing the work, when in fact the essential job of buying hospital and other services involves a vast range of tasks that practising GPs can’t possibly do, and aren’t trained to do – even if they decided to stop treating patients altogether.

In fact, the work calls for skills developed in the managed care industry in the US. The English healthcare market is going to be run on the principles developed there, not by the GPs whose ‘pivotal and trusted role’ is supposed to be central to it.

The change will also mean that GPs will be nominally responsible for the £20 billion of service cuts that are already starting to be made. How trusted will they still be after that? That remains to be seen.

2 The cost of commissioning

The second big deception is that focusing on who does the commissioning prevents a crucial question from being asked: that is, why do commissioning at all?

Running health services as a market is far more costly than running them as a public service. The Department of Health commissioned a study of the NHS’s administrative costs. Based on 2003 data, the authors found that administration absorbed about 14 per cent of the total budget, up from 5 per cent in the 1970s before the marketisation process began.

The department sat on the report for five years. It only came to light in 2010, by which time ‘payment by results’ (payment for every individual completed hospital ‘episode’) and other major additional market elements had also been introduced. The share of administrative costs is now probably more like 18 per cent or more.

The ideologues behind the Tory plan maintain that competition makes healthcare providers more efficient. But the evidence from the US suggests the opposite.

There is a good reason why this is so. Good healthcare is above all a matter of having enough, highly-trained staff; yet employing fewer, cheaper staff is the only way to make money out of it.

In reality, the plan to turn the National Health Service into a healthcare market does not rest on rational arguments but material interests. Any realistic strategy to resist the Tory plans must start out from that fact: the plans are not really new, but are the culmination of a decade-long campaign by the private health industry to get its hands on the NHS budget.

How otherwise could the white paper have been produced so fast – a mere two months after a general election during which none of its far-reaching proposals was even mentioned (let alone made an electoral commitment) by either of the two parties now in office? It’s hard to imagine that even the overall shape, let alone the detail, of the white paper, was put together in two months. So where did it come from?

The HMO/market model: how its foundations were laid

The reality is that successive Labour health secretaries, working closely with the private sector, had already constructed almost the entire edifice of a healthcare market. The Tory plan merely speeds up the final stage and makes it more clearly visible.

The idea that New Labour planned to replace the NHS with a US-style market, complete with HMOs, may come as a shock to some readers. But the fact is that HMOs have been the inspiration behind practically every element of the ‘system reforms’ pursued by New Labour since 2000.

One HMO in particular, California-based Kaiser Permanente, the largest HMO in the US, has been intimately involved in shaping the Department of Health’s strategic thinking. New Labour’s ‘reforms’ have been worked out in constant discussions with and visits to Kaiser. This includes the conversion of NHS trusts into independent businesses (foundation trusts); the introduction of ISTCs; payment by results; giving NHS work to private hospitals and clinics and encouraging NHS patients to choose them; changes in NHS staff contracts; and, not least, the development of HMO-style commissioning.

The US example

These changes have been introduced in a largely piecemeal fashion, concealing their overall intent. But when looked at with reference to the Kaiser model the various elements assume their true significance.

A defining feature of the US healthcare market and its HMOs is its complexity, with myriad forms of organisation and bureaucracy fragmenting provision, and with thousands of different ‘plans’ (i.e. insured packages of care) confusing customers, concealing profits and adding hugely to costs. It was precisely to avoid this expensive dog’s dinner that the NHS was created. But the basic structure is clear enough.

An HMO like Kaiser receives insurance premium income from its ‘enrollees’ (and for over-65s, from the US state’s Medicare programme), and then ‘manages care’ for them through three basic ‘arms’: 1) It owns hospitals and primary care/ambulatory facilities; which are 2) staffed by physicians, who, while nominally independent, are tied into an exclusive relationship with 3) the company’s insurance arm.

How do the New Labour/coalition plans correspond to the US model?

  • At the level of infrastructure, hospitals are being progressively removed from public ownership – all NHS trusts are to become foundation trusts and are then to become ‘social enterprises’ owned by their staff, not the taxpayer. Meanwhile privately-owned facilities are subsidised (sweetheart deals for ISTCs, charitable status given to Nuffield hospitals, etc).
Some struggling NHS hospitals will close, while others, such as Hinchingbrooke in Cambridgeshire, will be handed over to private companies to be run for profit. Mark Britnell, who was the Department of Health’s head of commissioning under New Labour and is now lucratively installed in the private sector, says Hinchingbrooke is ‘only the tip of the iceberg’ and anticipates perhaps 20–30 more such transfers over the next year.

ISTCs, too, provide ready-made privately-owned venues for ambulatory and short-term secondary care, while some 150 private hospitals and clinics in the ‘Extended Choice Network’ that are already available to NHS patients under the ‘choice’ agenda form the nucleus of an expanded network of private suppliers.

  • In terms of staffing, the Kaiser model calls for market relationships with independent teams of consultants, primary care physicians and nurses. In order to develop these, staff must be disengaged from the NHS and redeployed into the above-mentioned teams.
The main initial lever to bring this about will be the significant numbers of hospital doctors who become redundant under the cuts programme. At the same time, GPs already have a semi-independent status and can more readily be included in such teams, which have already been emerging in parts of the country. While such teams may initially have some autonomy, it is unlikely that they will be able to compete with the major providers in the long term; it is more likely that most will end up working for one or other of them, on the Kaiser model.

  • The third arm of the HMO model, the insurance function, will be the work of the new commissioning consortia, advised by – or, more likely, progressively outsourcing the work to – private health insurance companies, and some American HMOs. There are also indications in the white paper that patient choice of GP will in due course extend to choice of commissioning consortium – since all GPs will be required to belong to one, so free choice of GP means free choice of commissioner – and that the consortia and hospitals will become free to compete on price and not just on ‘quality’ as they do now.
It is likely that competing healthcare ‘plans’ will eventually be a feature of the market here too, as consortia begin to compete for patient income.

The insiders

Pushing through these changes is a tight-knit ‘policy community’, comprising a number of leading private sector figures, some doctors and some health policy think-tanks, working closely with a group of strategists within the Department of Health. Among the latter, a highly influential figure has been Professor Chris Ham, who was for some years head of the Department of Health’s strategy unit and is now director of the King’s Fund. Ham has been a long-term champion of Kaiser, organising a series of visits to the company’s California headquarters and being instrumental in setting up a number of ‘Kaiser beacon’ projects within the NHS to introduce and ‘normalise’ Kaiser’s aims and methods among NHS managers.

Even more emblematic is Dr Penny Dash. After working briefly for Kaiser in the 1990s, Dash was appointed head of strategy and planning in the Department of Health, and co-authored the NHS Plan of 2000, which initiated the marketisation process.

Since then she has served on the board of Monitor, led Lord Darzi’s recent review of health services in London, and is currently vice chair of the King’s Fund.

But it is Dash’s function as placewoman for the global consultancy giant, McKinsey, that is probably most significant. McKinsey has been described as the gold standard for the provision of corporate strategy advice to the Fortune 500 companies, and as ‘global thought leaders’ in the areas of strategy and operations management. The company has played a central role in ‘system reform’ in the NHS under New Labour, and Dash is now a partner in their London office.

One of her initiatives, the Cambridge Health Network, is essentially a McKinsey front for exchanges between private health corporations, financial institutions and the Department of Health. Sponsors of the Network include some very big game: Halliburton, General Electric, and Perot Systems, as well as our very own GlaxoSmithKline, BUPA, Assura (now owned by Virgin), Mott McDonald and Carillion. McKinsey has been in many ways a key architect of the reforms that have prepared the way for the coalition. It was also, not coincidentally, McKinsey who came up with the figure of £20 billion that is now starting to be cut from the NHS.

Resisting the destruction of the NHS

As everyone recognises, successful resistance to the Tories’ plans to cut back public services permanently will call for a mass mobilisation with exceptional levels of solidarity, organisation and commitment. But, as Gregor Gall has recently pointed out, the defeat of the poll tax – the last time anything on this scale was successfully attempted – is not a good analogy with the situation we face now.

The poll tax affected everyone; its injustice was massive and obvious; and it required people to co-operate by registering and paying the tax, which they could and did refuse to do in vast numbers. None of these conditions applies to the complex, uneven, protracted process of dismantling the NHS that the Tories intend to push through.

Yet the injustice that will flow from the loss of the NHS will be massive. It will change the face of English society more profoundly than the poll tax. And it will be for all practicable purposes irreversible – unless we stop it now, all of us resisting in whatever way we can.

— -

Summary: what the coalition’s plans means for the NHS

  • Hospitals that ‘fail’ will be left to go bankrupt and close, or be handed over to be run by private companies.
  • GP ‘consortia’ will run the service, in theory. But doctors don’t have the time or skills to do the large amount of administration required – and these are the contracts the private health companies are after.
  • There will be £20 billion of cuts. On top of that, the more complex the market system gets, the more money will be spent on administration instead of medical care.
  • The consortia will end up trying to reduce costs by denying certain treatments. And if they are to make money, they will do it by employing fewer, cheaper staff.
  • In place of a public service we will have a profit-driven healthcare market.
— -

Who’s taking over the NHS?

The main actors in the new GP consortia

The earlier attempt to encourage GPs to take on commissioning roles through ‘practice-based commissioning’ has been widely acknowledged to be a failure, mainly because most doctors prefer to focus on patients. This allows the 14 major US and UK health corporations, consultancy firms and insurers that currently make up the ‘Framework for Procuring External Support for Commissioning’ (FESC) to step in and play an increasingly central role in allocating the bulk of NHS finances. The FESC functions include population risk assessment, procurement and performance management, and data harvesting – but it is in service redesign that their impact will be most felt.

So who are these companies?

Aetna (US); Axa PPP (UK); BUPA (UK); CHKS (UK); Dr Foster (UK); Health DialogServices Corporation (US); Humana (US); KPMG LLP (US); McKesson (US); McKinsey (US); Navigant Consulting (US);Tribal (UK); UnitedHealth Europe (US); and WG Consulting (UK).

How these companies profit from the ‘revolving door’ in senior health personnel

  • At KPMG, the former Department of Health head of commissioning Mark Britnell now leads the company’s European Health Division. Britnell also has close ties with Dr Foster, having previously been one of its non-executive directors.
  • UnitedHealth now employs Blair’s former top health adviser Simon Stevens. It also has the former head of the Department of Health’s commercial directorate, Channing Wheeler, who, alongside Britnell, set up the FESC before being recalled to the US to face the securities and exchange commission on charges of illegally backdating share options at the time of 9/11.
  • BUPA has the services of former health secretary Patricia Hewitt in her role as advisor to the private equity company Cinven, which recently bought out BUPA’s entire hospital portfolio.
  • Tribal’s director of its healthcare division, Matthew Swindells, was chief information officer of the Department of Health and a special adviser to Patricia Hewitt. The company can also call upon Phyllis Shelton, who jumped ship from the Department of Health, where she worked as the lead for measurement on the integrated care organisation programme. Prior to this, she was the founder and managing director of the UK arm of HealthDialogue.
  • McKesson’s UK chairman is Lord Carter. As chairman of the NHS’s competition panel, he is well situated to ensure that decisions on mergers and procurement – including those on commissioning – will follow the privatisation route.
  • McKinsey has the Department of Health’s former head of strategy, Penny Dash. Some idea of Dash’s influence on the commissioning front can be seen in the fact that, in her guise as vice-chair of the King’s Fund, she led a recent briefing for PCTs to cut back on commissioning of what she considered to be ‘low-value’ medical procedures. Sure enough, in June this year, NHS North London proposed cutting back on ‘low priority treatments’.

red pepper has the copyright to this article which they have kindly allowed Dr Grumble to reproduce. Thanks red pepper.


Betty M said...

Thank you for posting this which I would otherwise have missed. I knew things were bad but this is truly scary. The worry is that it is really quite complicated to campaign against something this complex and by the time hospitals start closing whichwill galvanise people into action it may well be too late.

Cockroach Catcher said...

Hey, don't worry, the NHS is perfectly safe. Look at the banks, railway PFIs, many are back in government hands.
The Cockroach Catcher

Jobbing Doctor said...

Detailed, informative, and a lucid explanation of the real underlying reasons for all the current changes.

I read this elsewhere, and am pleased that Dr Grumble has posted it in full.

Let us hope that the useful fools who are pushing this new system think long and hard.......

Anonymous said...

I have much experience of working in the health sector in a variety of roles - sometimes campaiging against reform (including pro-market initiatives) and sometimes championing proposed changes (including some which might lead to more involvement from the independent sector in the NHS).

However, this article is so ideologically driven and utterly biased that it is cringeworthy. Dr Grumble should be ashamed to have given this kind of propaganda a platform.

Moreover, I have to say that some of the assertions are pretty close to slanderous and Colin and Stuart should probably have some lawyers on stand-by...

ZI said...

"this article is so ideologically driven and utterly biased that it is cringeworthy."

What would be your version then?

Garth Marenghi said...

great article, hits nail on head firmly and surely


with respect you are chatting pure hollow breeze,

you pretend to be neutral but can provide no decent argument to back up your assertions,

maybe you are the ideologically driven one and maybe you are the slanderous one?

Professor Parrot said...

What a good article; the Independent has hinted at such an honest appraisal but not as clearly as this.

Demetrius said...

As someone with a long term obsessive interest in complexity/chaos/collapse/catastrophe, it is all too evident where this could be heading in parts of the UK. Just as parents move house for their kids schools soon the moves will be taking place to where medical facilities still function. And there will be not very many to choose from.

Anonymous said...

thank you Dr Grumble,
for posting this
the more people that get to see articles like this the better

HyperCRYPTICal said...
This comment has been removed by the author.
the a&e charge nurse said...

What an extraordinary sleight of hand - vanishing the NHS in front of our very eyes?

Has there been a more important article written about the NHS?

I assume since NuLab and the Coalition are both singing from the same hymn sheet there is virtually no prospect of derailing the march to full blown privatisation, and all the inequalities associated with a system driven by cash for care?

Anonymous said...

I substantially agree with the analysis in the Red Pepper article, but differ in my response. As I see it all three main English parties favour "reforming" the NHS in this way. There is a lot of disunity amongst doctors as to whether some or all of the ideas will work. I do not think the process can or will be stopped, so propose to make the best of this democratically decided decision.

There are opportunities here for those with both business sense and clinical commitment to better many services. Competition is a strange beast and can worsen as well as improve services. I favour engagement at grass roots level. David Cameron spoke at the CBI this week promising that small businessess like my own Yerboots PLC will have a fair crack. Converting public sector monopolies to private sector ones does no good, a plurality and proliferation of small providers will have the flexibility and dynamism required.

Anonymous said...

1. Go public, stay public.
2. Work together with other groups fighting against the destruction of the welfare state.
3. Get out there on the streets.
4. Pass the message around the net again and again.

Diane said...

Sorry to be the voice of dissent here, but I'm currently on a career break from PCT-land (in fact have subsequently lost my job in our PCT's management cost cutting exercises) and am in the US looking at healthcare here. In fact, I've just spent all day today in a Kaiser medical center talking to their top doctor and top administrator. And, ironically, they are the least market-orientated version of US healthcare you can get. Don't get me wrong: the US healthcare "system" overall is screwed big-time and sensible people over here know that, plus Kaiser can be selective in its patients, services (they don't treat major trauma for example) and doctors. But in terms of their quality initiatives and cost-efficiency measures, it's not anywhere near as mercenary as you've set out, and there are lessons we can take back to the NHS from there. Whether there's anyone in the NHS interested in hearing them is another matter. The worry is that the NHS's "Liberating" reforms will make the NHS look less like Kaiser and more like the rest of the US's dysfunctional healthcare system.

the a&e charge nurse said...

"Whether there's anyone in the NHS interested in hearing them is another matter" - well, Diane, it sounds like the coalition (and NuLab before them) are tripping over themselves to learn about managed care - problem is, none these bastards have been brave enough to involve the electorate in determining (in any meaningful way) how health services in the UK should be structured.

Outside of blogs like this the majority of the British public simply have NO IDEA how far reaching these changes are going to be - that is wrong, surely?

Anonymous said...

Dear anonymous 2:41,

Why on earth would I want to do that? I think that the welfare state needs to be broken up, or we go to the poorhouse together. Iain Duncan Smiths ideas are the best review of welfare since the war. There needs to be the incentive to work, and similarly the incentive to stay healthy. The reason that none of the major political parties find the current NHS tenable, is that it is the truth.

the a&e charge nurse said...

"I think that the welfare state needs to be broken up", yes a common sentiment amongst the privileged.

Oh how I chuckle when rich kids like Cameron & Clegg utter platitudes like "we are all in this together'.

Ha, ha , ha , ha ..............

Dr Pepper said...

If you start with a healthcare market that is out of control, an organisation like Kaiser makes a lot of sense. It makes much less sense to develop a market so that organisations like Kaiser can run it.

Junior Doc said...

As I understand it, US healthcare outcomes are roughly equivilant or inferior to ours (broad generalisation, inc some knowledge of cancer, heart disease stats etc) but healthcare costs are roughly double the UK's per capita. This paradox comes through wealthy people having access to as much medicine as they can eat while the poor have none.

European countries (France, Germany, Switzerland) pay marginally more than the UK for healthcare per capita yet have measurably superior outcomes. Their model (again, generalising) is based partly on public funds and partly on private insurance - the companies providing the insurance are regulated to within an inch of their lives, however, and are not allowed to ration healthcare, turn people down due to chronic illness or discriminate against patients in any way.

Which system sounds better: the expensive, ineffective one or the cheaper, more effective one? Which one is the more profitable? With the answers of these two questions in mind, then ask yourself which system are we beginning to emulate in the UK?

Now look at the 'revolving door' part of the article and ask yourself why the architects of change in the NHS chose the path they did. The fat, greedy bastards...

drphilyerboots said...

dear a and e charge nurse,

It is worth noting that IDS plans for welfare reform do not substantially cut the welfare bill, indeed in the short term they increase it. The purpose is to simplify it, making it easier for claimants to understand and to have an incentive to work at all levels of benefit.

There is no doubt epidemiologically that unemployment is bad for peoples health and that work is good for both physical and mental health.

The millions on out of work benefits, often into the third generation, are testament to the failure of the british welfare state, and 13 years of Labour Government

the a&e charge nurse said...

"The millions on out of work benefits, often into the third generation, are testament to the failure of the british welfare state, and 13 years of Labour Government" - I'm sorry but this assertion is plain wrong, in fact, many are already drawing parallels with the coalitions slash and burn policy to Thatch in her pomp?

According to this item "A White Paper introduced later in 1979 proposed 5% cuts, but the Tories said this was not enough and further cuts were demanded in subsequent budgets. By 1983 Thatcher had carried out cuts equivalent to 6% of GDP. The abiding memories of this Tory regime were classrooms with leaking roofs and buckets to collect the rain and interminable waits for operations in hospital.
UNEMPLOYMENT WENT THROUGH THE ROOF, partly because of the cuts. The jobless total rose 836,000 to 2.13 million in 1980, the sharpest jump in a year since 1930. By 1982 2.7 million people had lost their jobs. If the way of counting had stayed the same, unemployment would actually have peaked at 3.3 million.
So Thatcher did something else that the Con Dems have been at since coming to office. She fiddled the figures. There were 29 different CHANGES to the jobless count under the Tories, all of which reduced the overall total".

In other words kicking the poor is deeply ingrained in the Tory mindset and since, Dr Grumble is already in a 'red pepper' sort of mood may I highlight another of their articles which looks at the terrible damage inflicted on communities following pit closures in Durham and Wales - acts which long predated the dreadful Mr Blair;

Anonymous said...

I would not agree that kicking the poor is in the Tory mindset. The difference between Tory and Labour mindset is in how the poor should be helped. The Labour party wants the poor to be dependent on the largese of the welfare state, the Tories want the poor to have assets and aspiration. Both parties do this for their own electoral advantage. For example the Tory sale of council houses at a discount to tenants allowed a large number to buy their own homes, and become the "Essex man" voters that kept them in power for a generation.

Despite 13 years in power the last Labour government finished with higher unemployment than it started with, as have all previous Labour Governments, from 1926 to the present day. One might want to consider whether they are doing something wrong!

IDS welfare reform proposals are well worth reading, he has very carefully considered the issues. They are not savage cuts, more an arrangement of incentives to eliminate the poverty trap.

Many of the 8 million on out of work benefIts now are as a result of fiddling the figures under the last labour government. An example is the increase in those on Disability living allowance from 800 000 in 1997 to 2.5 million today. 200 000 are on these exclusively for alcoholism or drug addiction. Is it wise to give an alcoholic an extra £20 per week to spend on drink if they are not on treatment? Only ifone wants them to die more quickly I suppose...

The Labour party recognises that the welfare state needs reform, and indeed getting people off disability benefits and into work, and capping housing benefit were in their manifesto in May.

I am not priveliged by birth, unlike Miliband, Harman or Blair. I am state educated and inheireted nothing but a work ethic, my comfortable life is down to my own hard work. I do recognise that not all have my talents or stable family background, but am convinced that the Coalition welfare reforms are the right thing for both the poor and the finances of the country.

Sam said...

The Milibands are children of Polish immigrants. They do not come from a privilaged background but had harworking parents who cared. They were both educated at the same comprehensive school and got into the same college in Oxford for their degree in PPE through one of those reach out schemes. Good for both of them too!

Anonymous said...

Dear Sam,

The Miliband brothers have certainly inhereited wealth, and with a father who was a professor come from a privileged background. http://www.timesonline.co.uk/tol/news/uk/article484468.ece

20% each of a house valued at £1.3 million is no mean sum. I reckon that at around £220 000 in that property alone, not counting other inhereitances in their fathers will. They seem also seem expert at legally arranging their tax affairs to minimise redistribution of wealth. Some of David Millibands subsequent property deals are also interesting, not least as they were in part financed by us via the second homes allowance for MPs.

the a&e charge nurse said...

I fear we may be derailing this incredibly important post into a a party political broadcast which as most people know tend to be boring at the best of times, but I will just quickly pick you up on x2 points, Dr Phil.

[1] Doctors should think very carefully before taking the ATOS shilling (if they care a fig about their credibility)?
"The TUC has identified a number of case studies who have been awarded "0 points" by Atos and declared fit to work, despite previously having been declared too ill to do so - When they met with Atos Sue Hutchings had breast cancer and was awaiting surgery, while John Watkins had his arm in plaster from his shoulder to his fingertips following an operation. Yet they were moved from ESA at £96.85 a week on to JSA at £65.45 a week, losing them each £1,632.80 a year in benefit support, and forcing them to start looking for work".

Iain "get on bus" Duncan-Smith has merely updated Tebbit's "get on a bike" mantra about the work shy poor.
Simple fact is there is a mismatch between the number of jobseekers which EXCEED number of jobs available - EU rules about economic migration has significantly effected the UK job market, something the powerless poor have little influence over?

Anonymous said...

I am not priveliged by birth, unlike Miliband, Harman or Blair. I am state educated and inheireted nothing but a work ethic, my comfortable life is down to my own hard work. I do recognise that not all have my talents or stable family background, but am convinced that the Coalition welfare reforms are the right thing for both the poor and the finances of the country.

And presumably you have benefited from good health which allows you to stay in employment.

Do you really think it is fair for the Tory government to blame those who are ill and diseased (and I'm not talking about alcoholics here) for the financial crisis and to remove their DLA and Incapacity Benefits?

If you were struck down by chronic incapacitating illness prior to becoming a rich consultant how would you have felt about being dependent on a Tory government that demonises the poor and vulnerable as benefit scum?

Sam said...

A professor IS a middle class hard working parent, isn't he? and [260,000] inheritance share of a house of 1.3m + bits and pieces is not what rich means these days Dr Phil ... afterall, that house was bought as a 'home' by prof for much less and just went up in value over the years like everybody else's ... the boys are inteligent and hard working alright, and do deserve the rewards that brings ... that's what striving for excellence is about; do it well and reap the reward ... just like you :-)

Anonymous said...

Dear all

first I must apologise to Dr G for the overuse of his excellent blog!

In reverse order;

Sam: I have no problems with the Milibands property speculation and legal tax dodges, merely wish to point out that for Ed Miliband to inherit nearly a quarter of a million pounds in 1994 aged 25 years is a lump sum that makes him fairly comfortable (though no amount of money makes up for the loss of a parent). State educated maybe, like Dr Phil, but definitely financially secure in a a way I was not at the same age.

To anonymous: yes I am in good health, partly through my own efforts, and this is a great blessing. I have no problem with those legitimately in poor health getting welfare, but am sceptical that poor health has tripled in the UK over the last two decades to account for the rise in sickness benefit. If so it is a damning indictment of the NHS. This moves people from out of work benefits to disability benefits, massaging the figures, but statistically those on long term disability are the least likely to re-enter employment. All three main parties want to get people off the sick, and into work, not just the Tories. The beneficiaries in the article cited by the a and e charge nurse seem to have been hit by rules brought in by the Last Labour government.

Like it or not, it is agreed across all 3 main parties that there are many on sickness benefit who are capable of some sort of work. It is not a Tory policy, not a Coalition policy, it is also Labour Party Policy.

A and E charge nurse: I think that you make the common mistake that jobs are finite in number, and that EU migrants are taking British workers jobs. I would not agree with either view, though it does raise the question of why Latvians and Poles are willing to work the fields of England as unskilled labour, while the descendents of English farmworkers are not.

Jobs can be created, take my Private practise for instance. Assume that I invoice for £130k. 30k goes to my secretarial and clerical staff as salary. The work keeps the private hospital solvent with it's fifty workers employed. I take £100k as earnings, and £45k in tax is paid (enough to pay the salary of a band 6 A and E nurse for the NHS). The remaining £55k I spend as I choose, with a further gain for the taxman via VAT, and livings generated for both car and golf club retailers.

Now imagine a govt bans private medicine and CEAs. I fulfil my NHS commitment the same as now. I go home early and play more golf (albeit on the municipal course). My private secretary is made redundent, my tax bill goes down, there are redundancies at both the private hospital, and government ones including the Band 6 A and E nurse that I was paying for. I'm sure you get the picture.

The private sector will create the jobs and prosperity if the conditions and incentives are right. When initiative and industry are rewarded, and bettering oneself is not punished either by the welfare poverty trap, or penal taxes.

I think I have said enough now, a busy day looms again tommorow.

Dr Phil

Sam said...

"The private sector will create the jobs and prosperity if the conditions and incentives are right. When initiative and industry are rewarded, and bettering oneself is not punished either by the welfare poverty trap, or penal taxes."

Spot on Dr Phil! ... add to that that the public sector too will function with much greater effeciency and at much lower cost if a similar culture of fair pay, incentives and rewards for excellence are in place. So, in addition to what you said, remove the CEAs from effecient and innovative consultants or work the juniors for peanuts as well as 'fr free' and they will stagnate and the whole operation will become much more costly as is the case now, because of that lack of 'ownership' which you have rather brilliantly explained in your comment.

Freebies are notoriously expensive, fairness pays ... always! ... but no one is listening out there!

Dr Grumble said...

While there are not enough jobs it does seem that able immigrants seem to find employment easily. Some of these have entered as highly skilled migrants but have taken jobs that could be done by home-grown less skilled workers. But there are also unskilled people working in the fields who are prepared to do jobs no English worker would take on.

For a healthy society and the health of individuals we do need to have as many people in work as possible and it does seem to me that the benefit system can lock some people out of work and this can be on doubtful health grounds.

Anonymous said...

To Anonymous 02/11 12:39,

Your comment (pasted below) was absolutely spot on as I sadly know from personal experience:

"If you were struck down by chronic incapacitating illness prior to becoming a rich consultant how would you have felt about being dependent on a Tory government that demonises the poor and vulnerable as benefit scum?"

I don't fit into any of the demonised categories the media rants and raves about on disability benefits (workshy, alcoholics, self inflicted illness such as overdose, drug addicts or the obese. I am severely debilitated by a multisystemic illness that hit around 4 years ago and if you think I have nothing to fear from the government who claim they "are only after fraudsters and genuine claimants have nothing to fear" then as God is my witness you must be living in cloud cuckoo land to think that.

My Drs can vouch for the fact that there's no way I'm "fit for work" and wont be able to work (even part time or voluntarily) when my ESA expires next year. I am one of those genuine claimants that the government says should have "nothing to fear" but this time next year, I'll be shoved onto JSA and told to sign on every two weeks (even though I'm housebound so wont be able to go) and ordered to look for work if I want my benefits to continue.

I am not the exception- this problem is rife and I resent the implication that the government is doing us all a big favour in screwing with and squeezing the most poor and vulnerable members of society.

Sorry to derail the discussion from Dr Grumble's initial post which was fascinating (and I will pass it around), but I felt Drphilyerboots needs to wake up from his delusions of what these government changes will do to people on the ground.


the a&e charge nurse said...

"IDS welfare reform proposals are well worth reading, he has very carefully considered the issues. They are not savage cuts, more an arrangement of incentives to eliminate the poverty trap".

Not everybody takes such a sanguine view Dr Phil, as far as I can tell plaudits are mostly coming from those nicely insulated from the effects of IDS's, er, vision?

There is a post by RedMiner that is causing a bit of a sensation on the net (see first comment after main article)

RM says, "in the new Dark Age heralded in by IDS, every morning will be Christmas Morning for the beneficiaries, the businesses who will exploit this measure to access free labour, the talk of charities being a transparent smoke screen to hide the fundamental dismantling of the human right for a fair day’s pay for a fair day’s work.

Make no mistake, this is just the beginning. Anyone who thinks that once the principle of unpaid labour has breached the social repugnance it generates that it will stop at a month’s work for ‘idlers’ is the kind of fool the Tories are relying on get this through. These are the descendants of people who built vast fortunes and empires on the sweat and death of their factories and workhouses; they are past masters at dressing up inequality and evil in Protestant work ethics and biblical rhetoric denouncing the peril of idleness – except where it’s practised in its purest forms of course, by digital fortune shufflers and land owning parasites drawing their subsidies while they indulge Mediterranean waves with their oversized cock-yachts".

I must admit doctors championing welfare cuts grates a bit - given that British medics are some of the best paid in Europe how come you don't volunteer a 20% pay cut (surely no great hardship for anyone on £100k) - or will we get the usual rhetoric about how you do not earn as much as top city lawyers?

PPLIC said...

Nice article. very interesting, thanks for sharing.

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