Welcome to my day: 7 November 2022 – the hypocrisy of a “free market”

With the news that nurses have voted to take strike action – and it should be borne in mind that the result of the strike ballot isn’t official yet, merely rumoured – the Sunak administration faces an early test of its popularity (or lack thereof).

Offering 4% would, in most recent years, have been seen as rather good given the ongoing squeeze on public sector pay since 2010. But, with inflation hovering above 10% and effectively higher for those on lower salaries, it comes as another blow to a workforce which knows that it’s running to stand still. Of course, a private sector operation in such a position would have the choice of cutting services or increasing pay to address shortages such as the NHS has – 40,000 nursing vacancies, exacerbated by the loss of EU freedom of movement and the additional costs now incurred by foreign nurses who might think of working here.

Sadly, the Government appears not to understand that the free market applies to public sector jobs too. If you don’t pay competitive salaries, and you require staff to effectively compromise standards in order to achieve throughput, you shouldn’t be surprised when recruitment and retention become a problem. And there comes a point when blackmailing them with “but think of the customers!” doesn’t cut it any more.

And yes, Conservative thinkers will see this as an opportunity to push market-based solutions for the NHS. They always seem too. But the American model is less effective, more expensive and excludes 15% of the population, which leads you to wonder why, if it’s so successful, nobody else has attempted something similar.

The nurses won’t be the only ones. With increasing numbers of civil servants now swept up by the National Living Wage, it becomes more and more difficult to engage people in customer facing roles with sufficient expertise to deal with questions or process information. Government costs.

£60 billion in spending cuts and tax rises spells unpopularity – it’s never likely to be any other way – and with the Government’s popularity at an already low ebb, the prospect of grannies in hospital corridors and public sector workers withdrawing their labour should make Sunak, Hunt et al very nervous. That is, if they really comprehend what it means.

Meanwhile, the Party’s internal elections continue, as voting is open until next Tuesday. There have been questions asked regarding the absence of pieces from two of the three Presidential candidates and all I can say is that they were all invited to write for us. If we receive something, and it fulfils the guidelines laid out for publication, we’ll happily publish it.

We’ve got our hopefully regular preview of the week in the Lords to come this morning, and Richard Kemp has written about something of interest to social media users amongst us. We’ll also have news of a recently published book which might help those of you looking for ideas for Christmas gifts – it’s less than seven weeks away!

And with that, it’s time to launch this week’s debate, here at Liberal Democrat Voice…

* Mark Valladares is the Monday Editor of Liberal Democrat Voice. He enjoys the occasional cheese sandwich.

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  • The NHS – and the wider health and social care “system” (to call it a system implies some sort of coherence) – does not have a free market for labour because there’s a shortage of supply of trained professionals – this data from the Nuffield Trust (https://www.nuffieldtrust.org.uk/chart/number-of-nurse-training-places) indicates the gap in nursing training provision, with similar shortages in training opportunities for doctors too. This problem hasn’t been addressed by any party – it’s just been covered up by recruiting from abroad. It remains a scandal that “our” NHS is effectively subsidized by some of the poorest countries in the world. If we want a world class health and social care system, the first thing we should ensure is we train enough people to work in it.

  • Jenny Barnes 7th Nov '22 - 11:01am

    It’s entirely possible that the Tories would welcome an NHS strike. Big savings for the public purse, more people go private, helping their mates. It would be more effective for the staff to work to rule. As – anecdotally – many are working many extra hours to make up for shortages of staff, working to the contract would effectively remove a large amount of labour without losing salary.

  • The TV campaigns for private medical cover have stepped up and focus on the ease of appointments and lack of waiting lists all for a ‘small’ monthly fee…

    We should also not be unaware that the Government is once again attempting to extract NHS patient data without consent and hand it over to a private American company, with a reputation for ‘sharing’ data with third-parties.

    The trouble we have is that levelling up will in the short-term cause a rise in inflation as some workers wages are increased compared to others. So we really need good tax and benefits incentives to encourage larger increases in low wages and much smaller increases in wages over say £80k and windfall taxation/fines (ie. fines aren’t tax deductable) for executive pay increases that are larger than those being offered to the wider workforce.

  • The problem is that the lockdowns and restrictions of 2020-2022 need to be paid for somehow

    The lockdown gouged a large chunk of our productivity for 2 years, in effect reducing the net wealth of the country. Furlough put the money printers into overdrive to fill this gap in productivity/wealth to the level we had become accustomed to.

    In the absence of actual productivity and the abundance of printed money, inflation was ALWAYS going to be the outcome.

    The way to address this lost productivity and surplus printed money is a standard of living squeeze through this period of inflation without wage increases. This pays back the lost productivity and printed money. Not nice, but wage increases now just prolongs the inflation

    All this was explained prior to lockdown, but lockdown enthusiasts wouldn’t listen. In fact they became extremely nasty, that bringing money and the economy into the discussion was somehow demeaning and devaluing, ignoring the fact that we need money and an economy to eat, shelter ourselves and heat our homes. The whole atmosphere felt so similar to those of us who warned of the dangers of the effect the war on terror from 2001. Then the extreme nastiness and authoritarianism came from Daily Mail types. This time round the extreme nastiness and authoritarianism came from Guardian types. This mirrors the proportional increase in nastiness and authoritarianism from the left compared to the right over the past two decades

  • Just a quick comment on healthcare system comparisons

    The inefficiency of the US healthcare system comes from the near unregulated private financing of healthcare (private health insurance), not the private provision of healthcare (private/non-state owned/managed hospitals). In Europe private provision of healthcare is actually very common. Indeed the Netherlands and Switzerland’s healthcare providers are exclusively private. And in both those countries the financing of healthcare (not long term social care) is also exclusively through private insurance, with a mandatory obligation to purchase. The difference is that the private healthcare insurance in both countries is heavily regulated, which mitigates all the market failure that occurs in unregulated healthcare financing that we see in the US. Indeed, Obamacare imitated the Swiss model, making the purchase of private insurance mandatory, but the implementation and assurance of this has been watered down extensively since 2016. Interestingly the Netherlands (unlike the US’ Obamacare) does allow regulated opt-outs, where Dutch people (usually for religious reasons) can actually opt out of private health insurance entirely and take the risk for medical bills themselves (with no state safety net). The fact that some religious groups view insurance as a form of gambling, and some fringe groups (such as Christian Scientists) oppose receiving healthcare in any circumstance on principle has actually held sway in the US for a long time, justifying the right for people to be uninsured for personal values reasons.

  • The comment. “….why, if it’s so successful, nobody has attempted something similar”, I imagine that is the NHS we are referring to.
    I always get slightly irritated when the NHS is compared favourably to American healthcare. Why not compare it to France, or Austria or any of those European nations with better cancer outcomes and shorter waiting lists than the so called “envy of the world” ?

  • Jenny Barnes 7th Nov '22 - 5:42pm

    We need to cut our energy consumption for climate change purposes. That means growth is impossible, and living standards will fall. Renewable energy sources mean we don’t need to cut quite as fast, but we can certainly no longer grow our fossil fuel consumption by 2% or so each year, with renewables extra. Much of that could be achieved, at least initially, by considerable reductions in aviation, especially private jets and jamboree conferences, and by relocalising our economy so that cars stop being essential: walking, cycling and public transport instead.
    The soaring price of fossil fuel in effect helps us with what we need to do anyway.

  • 1) Extreme free market ideas scrounged off Ayn Rand, Hayek and Friedman have had their day and were never popular. They got tangled up in the wider Tory internal coalition and somehow managed to become dominant under FPTP voting and our 2 party + fringes system. To assist this position this they used fascistic Loyalty Agreements, expelling moderate MPs, Proroguing Parliament, keeping measures out of Parliament ( e.g Trade Agreements), taking over the judicial Electoral Commission and BBC. Removing Court powers over government will be one of their next intended mash ups of the rule of law and democracy.

    Extreme free market positions are a nonsense given the need to Green the economy, to keep the social fabric from collapse and improve services and infrastructure. Northampton Council tried to contract out everything privately and went bankrupt to become minimally government administered which you can see where the roads meet with Oxfordshire.

    Globalisation has been going sharply into reverse, starting with Huwawei reversals, lockdowns, Russia’s invasion and the sanctioning of China by USA on high tech, which means it can no longer make anything needing medium to high end semi conductors (I.C. chips) , including passenger planes and a lot of military gear.

  • 2) USA is now re-industrialising and reshoring at an expansion rate that has not been seen for many decades. Long supply chains are no longer reliable and will have to mainly become national or regional, which makes the expanding Global Britain idea a total nonsense, the reverse of what is possible.

    Not much of this is in the regular media, but it’s happening. We are into another age and
    free market fantasies which used to enrich the rich are no longer even a serious option. The LibDems must not be offering more of the same dry economic Orange Bookery.

  • James Fowler 7th Nov '22 - 9:26pm

    I salute your bravery James Pugh. Even just a year ago you’d have been howled down as murderer for daring to suggest that there might be trade offs in the fight against COVID. There’s probably still a fair few commentators who think that lockdown was not only necessary but a good thing unto itself.

    As for the inflation, I think it has a lot of causes. One of them of course is the lockdown, but Russia’s war is there too, as is Brexit. I’m more sympathetic than you on pay. Let them push for all they can get. We’ve had nearly 20 years of getting far too used to paying valuable workers miserly 0-2% rises (i.e. cuts) and it’s well overdue that labour bargained harder. Why is it that every other kind of inflation is benign (housing) or unavoidable (energy) but the moment that wages might go up it’s a problem?

    I agree that lockdown, war and Brexit all have to be paid for. But I’m eyeing up capital gains on primary residences, the triple lock and merging NI and income tax, not nurses pay.

  • One factor causing our financial problems is of course the trade barriers with the rest of Europe. Small firms, which should be growing to ensure our future, find it difficult because of paperwork, and the fact that small shipments are more likely to be held up for checks, and another example we have succeeded in almost de trying our fishing industry partly because of problems with exporting to Europe.
    I say take back control by joining a free trade zone with our nearest neighbours. Northern Ireland has these benefits, why not the rest of us?

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