Labour Parties

Keaney Michael Michael.Keaney at mbs.fi
Wed Sep 25 07:43:25 MDT 2002


Mark writes:

Thatcher had a definite strategy for NHS
privatisation, and reorganized the NHS into 'health care trusts' which were
set in competition with one another and which were destined to be turned
into corporate entities and eventually listed on the stockmarket and/or
sold off.  This plan has been abandoned, not least because it was
politically very unpopular and helped the Tories lose the 1997 elections.
Safeguarding 'our' NHS became a totemic commitment and the 2001 election
was fought primarily on this issue; the Tories tried to make the 'defence
of the pound' an issue but their anti-euro bandwagon did not work. If Blair
is planning to privatise the NHS then he's going a funny way round it,
since some recent actions of the Labour govt's health seretary including
purchasing private hospitals and bringing them back into the NHS.

-----

Maybe one way of looking at this process is to go back to the policies of Harold Wilson's 1960s governments, in which the Industrial Reorganisation Corporation was created with the purpose of restructuring UK industry with the intention of creating "national champions". This sort of thinking is far from dead within the British state/Labour Party, although it has been modified to suit the changed circumstances. Thus failing private hospitals have been "nationalised" (e.g. the scandalous Health Care International complex in Clydebank, Scotland), at the same time as the NHS has been reorganised into primary care trusts and secondary care trusts. The logic of the purchaser/provider split in the "internal market" of the Conservative reforms has been retained in modified form, in that the providers have been restructured into more viable units that take account of the health care quality lapses that (inevitably) occurred under the older system, which encouraged sloppy care thanks to!
 a focus on cost. The Bristol royal infirmary paediatric cardiac surgery scandal came about as a result of one trust doing its utmost to "compete" with other trusts, winning "contracts" on the basis of cost but failing miserably to provide a decent service. Then when alarms were raised traditional professional codes of silence kicked in and you ended up with the worst of both worlds. Now secondary care trusts are bigger and more specialised, focused less on competing for contracts from primary care trusts but still tied to performing with a prescribed level of financial, as well as medical, efficiency. Within the government health minister Alan Milburn wants to "free" successful hospitals from the constraints of the government's audit regime in order to encourage "excellence". Such independence can lead only one way. Meanwhile Gordon Brown is afraid of losing financial control over these supposedly "excellent" performers so opposes Milburn's strategy, instead arguing for the r!
etention of the current Treasury-dominated system *for the time be
dept and all the kudos that goes with being associated with "saving the NHS". However these same Treasury rules are forcing secondary care trusts to go down the PPP route, regardless of the evidence accumulating daily of financial overspend, inefficiency, graft, incompetence, etc. The model Brown is advocating is one of several variations within the general World Bank "state as guarantor" model, in which a basic level of universal care is backed by the state, but the delivery of that care is a matter for individual states to sort out in the most "efficient" manner. This is particularly relevant when considering that US prerogatives will have been factored into this model, and that any future universal health care coverage in the US will, of course, be designed to benefit the private sector and, possibly, the American Medical Association.

Ultimately I expect the NHS to be transformed into an Office of the Health Care Regulator, which will preside over a set of local health care monopolies and regional specialist centres, all of which will provide a minimum care standard subject to costing models dreamt up by salivating academic economists eager to get a piece of the action. These local monopolies may exist formally within a National Health Service structure (should one still exist) or be private concerns. Who needs "the NHS" anyway if the government promises to guarantee a basic level of care? This is consistent with Tony's policy of "whatever works", with the proviso of course that it's whatever works for the private sector that usually gets the nod. In addition, these health care providers will be well-placed to capitalise on their experience when other countries' health care "markets" are opened up to "competition". In other words, British health care providers will be well-placed to clean up when a new GATS!
 regime takes hold.

The NHS has been painfully slow in adhering to this process precisely because of the political sensitivity surrounding it, but it is bending nonetheless. Check out the work of Allyson Pollock, who has come under attack from vicious New Labourites like David Lock, the ousted MP for Kidderminster who has since taken over as head of the National Criminal Intelligence Service.

On Lock vs. Pollock see http://archives.econ.utah.edu/archives/a-list/2001/msg04349.htm

You continue:

This may be true but I read an article I think in the FT last week-can't
find it now--which suggested that the real reason for Gordon brown
obsessing about private-finance schemes is because he wants to get some
major public assets off the books, before major (state-funded) investment
programmes begin: these include the London Underground, the railways and
others things. The reason is because otherwise Britain will run foul of the
European Central Bank's  public debt requirements.

-----

I very much doubt this. Evidence accumulates daily of the overwhelming desire within the EU to tear off the straitjacket, and EU Commission vice president Neil Kinnock is on record as basically telling buddy Blair that special arrangements, even under existing frameworks, can be made on behalf of British entry to the eurozone. No wonder Will Hutton is excited:

See http://lists.econ.utah.edu/pipermail/a-list/2002-September/020530.html
http://lists.econ.utah.edu/pipermail/a-list/2002-September/020563.html
http://lists.econ.utah.edu/pipermail/a-list/2002-September/020732.html
http://lists.econ.utah.edu/pipermail/a-list/2002-September/020733.html

But these special arrangements are unlikely to be necessary, except as a means of defence for Blair when he eventually sticks his head above the parapet over a eurozone referendum, which is most likely next year. When ECB chief Duisenberg retires next year that will be a golden opportunity for tearing up the stability and growth pact, which is increasingly recognised as an unnecessary brake on reflationary policies now deemed necessary by economic orthodoxy.

Again there are more fundamental and petty reasons which can be attributed to the stance adopted by Brown. The petty ones are easy. He absolutely loathes Ken Livingstone, who challenges his personal authority (on economics, in which Ken fancies himself as a talented amateur, cf. his past publication of the "Socialist Economic Bulletin"; and politically, since Livingstone has actually once demanded Brown's resignation as Chancellor). The more important structural reasons relate to the Treasury's adoption of the World Bank state guarantor model of public finance and social policy, and its happy convergence with traditional Treasury hegemony in UK state financing policy. Livingstone threatens all of this because his scheme for the Tube, despite being more viable, is a direct challenge to Treasury and ultimately central government hegemony over London and other localities, because it sets a precedent of local initiative trumping central government authority both financially and po!
litically. Blair and Brown are also tied to their assiduously courted friends in the City, who were outrageously compensated for their "risk-bearing" (ha!) in taking ownership of Railtrack, which has had mammoth amounts of subsidy pumped in to keep it financially alive. I reckon that somewhere a calculation has been made that in order to preserve sufficient autonomy vis a vis the US the UK government must keep the City sweet otherwise there is a risk of an engineered financial crisis like the one leading ultimately to Brown's biggest nightmare, a re-enactment of the 1976 IMF intervention, which was all about asserting US dominance over the UK, and which Blair and possibly Brown (I can't be sure, but who can) are desperate to get out from under via membership of the eurozone. Then there are the major contractors like Amey and Jarvis who will be looking for some kind of quid pro quo in their generous funding of the seriously indebted Labour Party, in the form of juicy PPPs. And !
there is an extensive apparatus supporting the PPP agenda stretchi
linked symbiotically with the state -- most egregiously in the form of "Sir" Steve Robson, the former career civil servant who happily claims responsibility for rail privatisation and now sits in a senior position on the board of Royal Bank of Scotland.

You ask:

In any case, is privatisation really the issue?

-----

It's important alright, and, as the example of Livingstone in London shows, a significant terrain of struggle. Livingstone is tactically astute but lacks a mass support base which limits his room for manoeuvre. There is also the issue of just how much room for manoeuvre he would really like, since we cannot really tell if he's really "Red Ken" any more. But that's not important. What is important is that he is providing one of several focal points of resistance to a model that is intended to provide a framework for the great global trading regime in services envisaged by Stiglitz et al, in which "social justice" in the form of minimal state guarantees is neatly packaged with "efficiency" and "innovation" (i.e. profiteering) -- the Third Way writ large.

You end:

Electoral abstentionism is ultraleftism, it is a way of disarming the w/c.

-----

Given the recent discussions of ultraleftism, I'm not sure if that's a useful term any more, since on many issues I would be ultraleft to some, whilst not left enough for others no doubt. But I think my previous post in this thread clarified my position on electoral abstentionism, and was at least partially vindicated yesterday by the brilliant performance of Labour MP Alan Simpson in the House of Commons. In other words, we agree absolutely.

Michael Keaney

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