State sector to rise in UK for health needs

[Chris Burford <cburford@xxxxxxxxxx>]

With much internal anxiety and hope that they have not misread the focus
groups, Labour's Gordon Brown, has finally increased direct taxes, in order
to fund an increase in the National Health Service.

This will raise the proportion of the GDP going to the state sector from
under 40% to over 40%. It will still be up to 6-7% behind the proportion in
some European economies.

Although the British Social Attitudes Survey shows a large majority of
respondents saying they will pay higher taxes for an improved health
service, Labour fears the secret votes for self interest in the privacy of
the polling booth, that sent Labour down yet another election defeat in 1992.

It cannot have forgotten the populist tax revolt against fuel tax last
year. Indeed today's budget has a freeze on petrol duty and vehicle tax.

We do not know how closely Labour have done their voters' analysis. They
may have decided that the "middle class" are major beneficiaries of the
National Health Service, because they get essentially a free insurance
against the uncertainties of poor health, which can be ruinous. On the
other hand the middle classes are prosperous enough to buy extra care on
the margins - a quicker hip operation, and greater privacy in hospital. In
many ways the "middle class" with their sharp elbows, get the best out of
the present communistic British NHS.

The government have timed for today the publication of the report by Derek
Wanless of Nat West Bank that recommends major additional expenditure on
the NHS over the next 20 years to bring it up to continental standards, AND
that state taxation is more efficient than pay as you go, or insurance, to
finance it.

Expenditure on the NHS is now due to rise at double the rate of inflation,
for the next few years. It will go up from £65 billion pa to £105 b in 2007.

The Conservatives have abandoned their call in the mid 90's for the state
share of the GDP to go down to 35%. They are saying the NHS needs more
funding, but they are relying on people being more critical about whether
they are satisfied with the delivery by the NHS. They presumably calculate
this will raise sufficent doubts, for people in the ballot box to vote for
the lower tax party with a muddled conscience.

This budget is a sign of New Labour's hidden claims still to be left wing
in any form. It is likely that in the next few days, to preempt attack,
they will emphasise a New Labour programme of modernising and partly
devolving NHS management.

The politics of health care are a theme in all developed capitalist countries.

Chris Burford

London