Editor’s blog Monday 12 October 2009: Cameron Conservatism, the NHS and big government

“The NHS is safe with us” was the infamous line of Margaret Thatcher’s, in response to the leaking of a Cabinet discussion paper proposing a private health insurance system for the UK, to break up the NHS.

Many people did not quite believe Mrs Thatcher’s line, even though the NHS saw real growth in spending every year (if not always above inflation, and far behind the levels of comparably wealthy countries).

A key message of David Cameron’s closing speech to the Conservative Party conference last week was that the NHS will be safe in his hands.

It seems widely accepted that not only is Cameron’s commitment to the NHS a real one, there is a significant reservoir of public confidence that the Conservative Party can be trusted with the NHS. Opinion polls now show Labour resuming a lead on the NHS over the Conservatives according to Health Service Journal, but it is a lead of only one percentage point.

The party of the NHS?
For three years, the Conservatives have been trying to rebrand themselves as “the party of the NHS”. Cameron’s personal commitment has clearly been forged by his experiences of the high levels of care needed by his late son Ivan.

His exact words to close his party conference were, “My family owes so much to the National Health Service. No, it is not perfect. But I tell you, when you’re carrying a child in your arms to Accident and Emergency in the middle of the night and don’t have to reach for your wallet it’s a lot better than the alternative. So we will never change the idea at the heart of our NHS, that healthcare in this country is free at the point of use and available to everyone based on need, not ability to pay.

“But that doesn’t mean the NHS shouldn’t change. It has to change because for many people, the service isn’t good enough. Mostly, that’s not the fault of those who work in the NHS.

“The fault lies with big government. With their endless targets and reorganisations, Labour have tried to run the NHS like a machine. But it’s not a machine full of cogs. It is a living, breathing institution made up of people – doctors, nurses, patients.
This lever-pulling from above – it has got to stop. With Andrew Lansley’s reform plans, we’re going to give the NHS back to people. We’ll say to the doctors: those targets you hate, they’re gone.

“But in return, we’ll do more for patients. Choice about where you get treated. Information about how good different doctors are, how good different hospitals are.
Information about the things that really matter, cancer survival times......the rate of hospital infections......your chances of surviving if you have a stroke.

“We will give doctors back their professional responsibility. But in exchange they will be subject to patient accountability. That’s why we can look the British people in the eye and say this party is the party of the NHS now, today, tomorrow, always”.

Choice and small government: the placebo effect?
There are some fascinating themes here. The most obvious is the faith in choice as a driver of improvement. This is an area where the evidence is mixed, to put it mildly. After three years of free choice for elective care provision across the whole of the NHS, most people are still choosing their local hospital.

Another interesting theme is the suggestion that the faults in the NHS lie with big government. Let’s set aside the fact that a single-payer system, free at the point of use (to which Mr Cameron re-commits himself) is the ultimate example of big government.

Yet surely the majority of policy experts would suggest that the NHS is bedevilled by poor care co-ordination for people with long-term conditions; unacceptably wide variations in clinical activity rates and quality of outcomes; inadequate IT to support commissioning; inadequate efforts to move the business of health upstream to prevention and promotion; and lack of clinical engagement in reform. The concept that these problems can be sorted by a nice dose of choice and hands-off government is not immediately intuitive.

Despite intermittent idiocies, Andrew Lansley is a knowledgable shadow health secretary with a grasp of many of the real issues. It was interesting that, given the attack on quangos, there was no mention in Lansley’s speech of the plans for the NHS to be run by an independent board, which have been party policy for three years.

It is an issue worth exploring, because of one of the main themes of Cameron’s speech: reducing the size of government. There is an inevitable and serious philosophical tension between a strong commitment to the NHS (and to protecting its funding) and the faith that the state must do less.

Society and the state
There is considerable emotional traction in Cameron’s lines on “the state is your servant, never your master … there is such a thing as society, it’s just not the same thing as the state”.

Another theme of his speech was anti-big government: “Labour say that to solve the country’s problems, we need more government. Don’t they see? It is more government that got us into this mess. Why is our economy broken? Not just because Labour wrongly thought they’d abolished boom and bust. But because government got too big, spent too much and doubled the national debt”.

Cameron’s analysis of the causes of the financial crisis here is neither serious nor credible. He correctly analyses one aspect of the problem of welfare dependency in his lines about “the worst thing about their (Labour’s) big government? It’s not the cost, though that’s bad enough. It is the steady erosion of responsibility”.

However, irresponsibility is a symptom; not a cause – both in poor communities, where it leads to anti-social behaviour and the destruction of communities and in the financial and banking sectors.

Moreover, it is unclear that Cameron has serious proposals to successfully distinguish between the deserving poor and undeserving poor, as his remarks imply is the solution.

The Tory proposal for a ministerially-appointed independent board to run the NHS is a fascinating approach: taking a system with very little democratic accountability and giving it even less.

False economic choices
Cameron has given Labour ample weapons of economic attack, should they be smart enough to notice them. He complains in the speech that in 2010, UK debt will be “twice as big as when we nearly went bankrupt in the 1970s”.

The size of the UK deficit is certainly important. Yet the size of the economy and the prospects of returning to growth are much more so. For reference, the figures that I’ve been able to find based on IMF data suggest that in 1975, UK GDP was £105,773 million pounds. In 2005, it was £1,209,334 million. Unless my maths desert me, that makes our economy ten times bigger now than then.

The pound has been devalued, offering some help to British exporters. Serious commentators, such as former BoE monetary policy committee member David Blanchflower, have a very different reading. It was Blanchflower who dissented from the raising of BoE base rates when the sub-prime US contagion to the global banking sector was apparent.

The size of government
The paradoxes of economic intervention by government in this recession are several. While the government spends more on welfare because of the destruction of jobs, our levels of benefit are not so generous as to provide the kind of ‘automatic stabilises’ seen in European economies such as France, Germany and the Netherlands.

Until the economy returns to growth, the government is stuck between a Hobsonian choice between doing too little to stimulate the economy (and reducing the deficit) - which may see the recession worsen, possibly into depression, as happened in Japan; or stimulating the economy (and raising the deficit by bringing spending forwards and printing money through quantitative easing of the money supply to re-float the bust banks) - which upsets the international financial markets, devalues sterling and risks storing up inflation.

The role of markets in public goods (such as healthcare) has had staggeringly little discussion. Where it is clear that providers in what is thought to be a market cannot be allowed to fail, as in banking, then large parts of economic dogma and doctrine must be questioned in how they relate to that sector. The UK banking sector has conclusively demonstrated that retail banks are effectively utilities.

Another fine example is the energy market, whose regulator OFGEM has issued striking warnings about the market’s potential to meet public needs. The OFGEM report states, “lessons from the financial crisis mean that it is prudent to examine whether we can rely on the risk management actions of individual market participants to deliver wider objectives on security of energy supply”.