Category Archives: Economic

Britain, Economic, Government, Politics, Society

Budget 2024: Reasonably competent but lacking in spark

BRITAIN

HAD the Conservative Party been 20 points ahead in the opinion polls, this week’s Budget by the UK Government would have seemed a sound and steady-as-she-goes statement.

Some of the measures it contained will help many of Britain’s hard-pressed families and businesses. A 2p cut in National Insurance contributions, the second in just four months, means the average worker will be £900 better off. The Conservatives insist they will abolish NI altogether – in effect, a second income tax by another name – as soon as possible.

There were tax breaks for second homeowners, a rise in the amount small firms and the self-employed can earn before having to pay VAT, and incentives for our booming creative industries.

The budget also cunningly shot two of Labour’s most cherished foxes.

The Chancellor, Jeremy Hunt, tightened restrictions on “non-dom” status for wealthy foreigners living here and extended the windfall tax on oil and gas firms largely because of the protracted war in Ukraine. Labour had planned to pour the money raised from these measures into the bottomless pit of the unreformed public sector and into recklessly accelerating net zero targets. Mr Hunt has used it instead to fund tax cuts for the workers – a commendable move.

If elected, Labour would now have to finance its schemes by either reversing the NI cut, raising other taxes, or saddling the country with even more debt.

By raising the ceiling at which higher earning parents begin to lose child benefit from £50,000 to £60,000, he is saving half a million families an average of £1,300 a year.

A laudable budget, but will it be enough to turn around Tory fortunes? Politically, they are stuck in the trenches and more probably needs to be done to get them back on the offensive.

Despite the budget’s reasonable competence, Mr Hunt’s budget lacked spark. There were troubling omissions: no help for the young to get on the housing ladder; no extra cash for our beleaguered military; no scrapping of the perverse tourist tax; and, most discouragingly, no income tax cut.

There was plenty of rhetoric about the virtues of a low-tax economy. Yet, we remain more heavily taxed than at any time since the 1940s. Freezing allowances has been the worst culprit, dragging millions of people into higher tax brackets, but there is no sign of a thaw. Work must be seen to pay.

Since lockdown, productivity has crashed, especially in the public sector. Although the Treasury has pledged to tackle this culture of sluggishness, we have yet to be told how.

The macroeconomic predictions for this year are good for the Government. Growth, though still low, is forecast to rise, banishing fears of any lasting recession, and inflation to fall below 2 per cent, driving interest rates down and the cost of borrowing.

The Conservatives could yet sail into a general election on a wave of optimism. There may even be time for a genuinely bold tax-cutting mini-Budget in the autumn.

This was a redistributive budget that has helped many, but by no means a sure-fire election winner. For the Conservative Party to win this year’s general election, more still has to be done.

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Britain, Economic, G7, Government, History, Human Rights, Politics, United Nations

Standing up to the global panjandrums

BRITAIN

IN Britain, it shouldn’t have gone unnoticed that the world’s great and good seem to have it in for us these days. Barely a week passes by without some grand panjandrum from a mighty global institution having a run-in with the way things are done on these shores.

The International Monetary Fund (IMF) is the latest to have a go. Last week its chief economist urged the UK Treasury to forego further tax cuts in its March Budget and pump-up public spending instead.

The IMF has form when comes to lecturing Britain – often getting it completely wrong in the process. The IMF has no particular expertise when it comes to Britain and often regurgitates the global consensus advocating high taxes and big government.

The IMF is also something of a slow learner. It consistently underestimates the performance of the UK economy yet remains stuck in a doomster type loop.

For example, just twelve months ago it forecast that the UK would be the only G7 economy (a group of the world’s major free-market economies) to suffer a recession, with a 0.6 per cent decline in GDP.

In the event the recessionary wooden spoon went to Germany, which is often the apple of its eye. The UK economy grew by only a smidgen last year, but, contrary to the IMF gloomsters, it did not decline.

However, the political damage had been done. When the IMF starts predicting that we’ll be the worst in class, a cacophony of vested interest groups among us with a permanent grievance against their country, start to shout loudly and gleefully about how this is yet further proof of what a basket case we’ve become.

Yet, when it transpires that the forecasts were wrong, they’ve already packed their bags and moved on to some other alleged weakness. They never pay a price or any form of penalty for running the country down on a false premise.

Of course, the IMF isn’t just wrong about Britain. It forecast the U.S. economy would grow by only 1.4 per cent last year when in fact it expanded by over 3 per cent. A significant difference.

It predicted its beloved eurozone would grow by 0.7 per cent when it barely managed 0.1 per cent. There is no doubt, though, that it has a particular penchant for being down on the UK.

Undaunted, the IMF is now forecasting that the UK will be the slowest growing G7 economy this year. That’s likely to prove once again to be a cheap stunt. A study of IMF predictions about British growth since 2016 found them to be wrong 80 per cent of the time – and always for being too pessimistic. The IMF has rarely been wrong for over-estimating the performance of the British economy. No surprise there.

Brexit has given added piquancy to the gloomy predictions.

The powerful elite of the IMF, World Bank, OECD, et al, have never forgiven the British people for blithely ignoring their advice not to vote to leave the European Union in 2016.

The current chief economist of the IMF, Pierre-Olivier Gourinchas, rushed into print two days after the referendum with a posse of other disgruntled economists to warn of all the dire consequences which lay in store for Britain. A year later, he was forced to admit none had materialised – but still thought our future prospects were grim.

Having found a comfortable berth in the IMF, the Frenchman is typical of the socialist-leaning types who now dominate the global power structures of the higher echelon. Previously, he was economic adviser to the failed French socialist government of Francois Hollande.

Yet he’s a veritable moderate compared to some of the people who produce reports about Britain that comes out of the United Nations. Its “special rapporteur on extreme poverty”, Olivier De Schutter, recently visited these shores to opine that poverty in the UK was “simply not acceptable” and insisted it violated international law. Welfare payments, he concluded, were “grossly insufficient”. You might think his time would’ve been better spent in Somalia or North Korea. The UN has a strange way of acting.

It is not clear exactly what qualifies this Belgian lawyer to pontificate on British welfare policy, but his remarks were nothing new when it comes to UN criticism of us. His predecessor accused the UK Government of implementing a policy of “systemic immiseration” when it came to the poor – this in a country which spends over £265 billion a year on welfare (over a third of all state spending). De Schutter claims it has got “worse” since those remarks were made.

To get the full flavour of his global Leftist mindset, we must consider what he said: “We should stop focussing on creating the macroeconomic conditions that will stimulate growth… and focus instead on providing support to low-income households… to create a much more inclusive economy rather than one that creates wealth for the elites and particularly for the shareholders of large corporations.”

And there it is in all its unalloyed, anti-growth, anti-capitalist glory. Put aside the fact that most shareholders these days are pension funds whose investments we all depend on for much of our retirement income. Just look carefully at what is being proposed: do not look to economic growth to help lift up the impoverished, look instead at greater redistribution of wealth from the better off to the poor (as if that isn’t already happening). The better-off in Britain already account for a huge chunk of tax revenues. The generous slicing of the cake has more than found its balance.

Force middle-income earners to pay even more tax in a no-growth economy and they’re likely to up sticks and head for friendlier climes, as Scotland is about to discover, undermining the very foundations of the tax base in the process.

These days there is no end of nonsense coming out of the UN about Britain. No more so than on human rights. Another rapporteur, dealing with such issues, recently complained about the “severe” sentences ordered on two Just Stop Oil protesters.

They were imprisoned for scaling the Dartford Crossing Bridge and causing traffic chaos for 40 hours. The UN saw this as an attack on the “right to freedom of expression”. It might want to look more closely at those currently languishing in the gulags and forced labour camps of Russia and China if it wants to see a real denial of human rights.

But no, its rapporteur doubled down, claiming new legislation in 2023 was a “direct attack” on public protest. I guess we’re just imagining the pro-Palestinian protests that have been commandeering central London almost every Saturday since the horrifying Hamas attack on Israel in early October.

But perhaps the greatest recent absurdity was the UN High Commissioner for Refugees (UNHCR) claiming that Government plans to send asylum seekers to Rwanda was wrong because Rwanda was “not a safe country”. Fair enough, you might think. Like many people in this country, I’m not a great fan of the Rwanda scheme either. But the UNHCR has recently been relocating vulnerable migrants from war-torn Libya to Rwanda itself.

This didn’t stop the High Commissioner from accusing Britain of a “general disregard for human rights”. This of a country in which, even if your asylum claim has been knocked back multiple times, it is well nigh impossible to be deported.

Despite the global elite never forgiving us for Brexit, the more the Left consolidates its grip on powerful world bodies, the more we are likely to hear this sort of nonsense about Britain.

There’s one other factor at work too.

We live in an age of identity politics in which the sins of the past, from slavery to colonialism, need to be atoned for. As a country complicit in the trans-Atlantic slave trade, which also presided over the largest empire the world has ever seen, Britain is in the crosshairs of the new global elite’s agenda.

It doesn’t matter that we were also the first to abolish the slave trade or that so many citizens of the old empire now want to come and live on these shores. We have sinned and we must be made to pay, through reparations and being cast down in ignominy.

There is only one remedy: to stand up for ourselves.

We know our past mistakes, but we also know the great contribution we have made to world progress. We don’t need lectures from the global great and good.

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Britain, Economic, Government, Health, Politics

Politically the NHS is non-negotiable. That has to change.

NATIONAL HEALTH SERVICE

Intro: The philosophy and funding model for the NHS is not fit for the 21st century. To fix it, we first need to admit that the NHS is broken

THE centrepiece of the opening ceremony of the 2012 London Olympic Games was a celebration of the NHS. This was understandable: the host country was projecting a healthcare system that is uniquely British.  

In this case, however, a description of “unique” says something deeply worrying. For it is uniquely British only because no other country has ever sort to copy or replicate it. The world was watching that Olympic opening ceremony, but no other country looked at those medics dancing energetically around the beds of their smiling patients and concluded that this was an institution they wanted to introduce into their own countries.

It is surely reasonable to ask, why not? And what does that say about the NHS?

There is no doubt that much of the public adoration of the NHS is founded on fading folklore memory of pre-1948 Britain when millions of people suffered illness and premature death because they could not afford to pay for a doctor. That obscenity cast a long shadow, but it’s time to consign such memories to the archives of history.

Most other countries, after all, have very similar histories. Britain was not unique in its suffering from appalling health inequalities in the past, or in its strident attempts to seek a better, more equitable way of looking after the health needs of its post-war population. Other nations faced the same challenges, and they arrived at different solutions.

But in Britain there can be no solutions other than the one that Nye Bevan, the Welsh MP who served as health secretary in the post-war Labour government, came up with more than 75 years ago.

We may live in a world transformed, a globalised world of advanced technologies undreamed of in the past century, a world of instant communication, high-powered algorithms, and artificial intelligence, but when it comes to health policy, Nye’s unflinching word is the secular equivalent of holy writ set in tablet and stone.

And heretics who doubt his word by quickly casting to the wind any suggestion of fruitful reform are castigated as malign. But maybe, just maybe, not everything the NHS does, and the way certain things are done, are perfect. Perhaps there are alternative ways of funding it, and that there might be lessons to be learned from the way other modern democracies provide healthcare for their own citizens.

Such is the current state of debate – stifled at every opportunity – and, yet the NHS is arguably the most important institution in the country. Funding has never been unlimited; the system has been stretched to its limits in recent years, resources are inefficiently allocated, and the country is still expected to provide a healthcare system for everyone based on 1948 ideals.

The combined cost of health services in England and Scotland is nearly £200billion a year. Despite this, still one in seven Scots languish on waiting lists for treatment. Economists predict that the funding crisis is only going to get worse as our population ages.

Why shouldn’t we be addressing these issues in a full and frank public debate? It would, after all, be in the interests of hard-pressed taxpayers’ who fund in full NHS services and provision.  

But every time politicians even raise the possibility of doing things differently, they are shouted down, accused of wishing to “privatise” the NHS or – worse – introduce an American style service that only the wealthy can afford, leaving the vast majority of people in Britain at the mercy of exploitative private health insurance companies.

And so, the unsustainable status quo goes on, with our political parties too frightened to explain exactly how they will address the demographic time bomb that is looming.

There are only two politically acceptable “solutions” to what now seems like a permanent NHS crisis: more funding – and even more funding.

Our politicians need to be slightly braver by showing some courage, by being more imaginative, and less terrified of incurring a disapproving look from voters. They need to be honest about the challenge we all face.

They would concede that a funding and organisational model brought into being a matter of months after the defeat of the Nazis, might not necessarily be the right model for healthcare in the third decade of the 21st century.

Could it be that any constructive criticism of the NHS, or any new thinking about alternative ways of funding healthcare, are shouted down because the arguments for maintaining the status quo are too fragile to withstand robust scrutiny?

TWO

WHY, then, faced with criticism of the NHS, do its defenders seek falsely to claim that the only choice is between what we already have and the admittedly dreadful service that American citizens must tolerate?

Why not admit that there are plenty of other health services in the world – systems that use a variety of funding mechanisms? And that many of them have better health outcomes than in the UK? Is it seriously being suggested that Britain has nothing to learn from those other countries?

The facts do not come any clearer. Britain comes nowhere near the top of league tables when international comparisons for cancer and cardiovascular survival rates are compiled. We even fall behind the United States on many metrics.

In a country whose society has been so fractured by our public debate about Brexit, it is extraordinary that even the most ardent Remainers, those who insist that the EU is better, more progressive, more caring, more tolerant than the insular, old fashioned, short-termist Britain, will draw the line at healthcare. We should all be more European in every aspects of our lives, they say, except when it comes to healthcare.

Germany, for example, has a healthcare system funded by a combination of public funds and private insurance. Its health outcomes, including life expectancy, puts Britain to shame.

The country has a public health system, but it’s financed in a radically different way from the NHS. Around 86 per cent of Germans are enrolled in schemes run by not-for-profit insurance organisations known as sickness funds. They choose which fund they sign up to.

These are paid for by deductions from wages with employee and employer contributions. Some small out-of-pocket payments are required for hospital visits and medicines.

The healthcare system in Germany is also better staffed than it is in the UK, relative to the population. Analysis by the Nuffield Trust in 2019 concluded that the UK had around nine nurses per 1,000 people, while in Germany there were about 14. The disparity in bed numbers was wider too, with Germany’s eight beds per 1,000 more than three times the UK figure.

In France, the healthcare system is funded by social security contributions, central government funding, and partly by patients themselves, who have to pay a percentage of costs for medical treatment or prescription drugs. Like the UK, France provides healthcare to every resident regardless of age, income, or status. But life expectancy for French women is the second highest in the world.

The healthcare system in Italy, also provided through a mixed public-private system, is considered one of the finest in the world.

Worryingly, a recent report by the King’s Fund concluded that Britain’s life expectancy rates are among the lowest in Europe.

As local health surgeries struggle to cope with the aftermath of the Covid pandemic, the dreaded 8am rush to get a GP appointment has become the bane of most people in this country. And every winter heralds a new crisis of hospital bed shortages.

And still the NHS is plagued by industrial action by nurses and junior doctors, who feel they are unrewarded, and have become cynical about their working practices and conditions of employment.

THREE

ACCORDING to the Organisation for Economic Cooperation and Development (OECD), the UK spends more on healthcare than comparable countries (about 11.3 per cent of GDP in 2022), but has fewer hospital beds and diagnostic tools, and pays nurses less.

Across the countries studied by the OECD in 2021, there were on average 4.3 hospital beds for every 1,000 in the population. But in the UK the figure was only 2.4 beds for every 1,000. Only Mexico, Costs Rica, Columbia, Chile, and Sweden, reported lower ratios.

So, what, if anything, can be done to improve things?

The first course of action should be to decide not to rule anything out. And yet that’s exactly what our politicians have always done.

Even when solutions are staring them in the face, they will insist that if it’s never been part of the NHS before, then it shouldn’t be in the future either. Even when other countries have successfully tried and tested those exact solutions.

The UK needs to be wiser about how to spend scarce resources. Every so often, a brave politician will tentatively suggest that patients should pay a small sum towards their GP appointments, or even be fined for failing to keep an appointment. But they are soon shouted down and told to behave themselves on pain of deselection or electoral defeat. The NHS is a political bargaining chip that is so entrenched with the electorate that political parties cannot budge over. Any governing party holds it as sacrosanct.

In Scotland, the introduction of free prescriptions for all was a major boost to the incomes of those already wealthy enough to pay for medicines. But woe betide any political party that might seek to reverse this redistribution of wealth from the poor to the rich.

Switching to a European-style social health insurance system would be no panacea – what works in one country could not be expected to work precisely the same way elsewhere.

But what does it say about the state of public debate in Britain that such a reform is immediately dismissed as being beyond the pale?

Germany, France, and Italy are hardly basket cases, or third world countries. Until two years ago, they were among our most important EU trading partners.

The question for policymakers should not be how best to preserve the NHS as it is, but rather how patients’ interests be prioritised?

The NHS was created to serve the country, not the other way around. It is not there to provide employment for its million-plus workforce. It is not there to create jobs for an army of administrators and bean counters.

And it certainly doesn’t exist to provide well-paid work for diversity, equity and inclusion officers, whose numbers have exploded in recent years with no measurable improvement in the quality of care given to patients as a result.

It exists for us, the UK citizens who pay for it with our taxes. That is its primary, if not its sole, function. And as the funders of the NHS, we should be insisting that it is no longer run in the shadow of a past that is viewed through rose-tinted glasses.

We should demand that it becomes a modern, flexible, dynamic, and innovative service.

We could start by shattering a central shibboleth of faith in the NHS: that privatisation is somehow alien to it, with its only aim to make profits from vulnerable patients.

In fact, the private sector is an essential mechanism for providing essential health services. Opticians and dentists, for example, earn much of their income from privately paying patients.

FOUR

EVEN local GP practices, our primary interface with the health service, are essentially private companies contracted to provide services to the NHS. No one in this country gets through life without dealing, at one point or another, with a private provider of healthcare services.

Institutional and financial reforms are necessary and inevitable at some point. But we as ordinary citizens must shoulder some of the responsibility for helping improve the nation’s health.

Far too often we have allowed politicians to convince us that our poor health – whether from being overweight, drinking too much alcohol, not taking enough exercise, or smoking – is not our responsibility, but is the fault, somehow, of the Government, or the food industry, or advertisers.

We are told to believe that we are powerless, susceptible to the diktats of these external forces.

We eat too much because planning laws allow too many fast-food restaurants to be built. We eat fatty, processed foods because we were never taught to cook properly at school. Many people smoke because they’re influenced by Hollywood stars doing the same on screen.

It’s all a big, dangerous lie. We choose what to eat and what lifestyles to pursue. If we rely on the Government to tell us how to live and to intervene to force us to make better choices, we surrender all responsibility for our own lives and our own health.

The combination is lethal. We rely on the Government to govern how we live and what we eat, and then demand that the health service we pay for through our taxes delivers better results, even as we rule out any kind of radical reform that might improve that healthcare system.

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