Page 4 The Euro Realist October 2006
OUR HEALTH SERVICE IN HOCK
BY ANNE PALMER
The Health Service WAS ours. We paid
for it through our taxes and it remains
(for now) free at the point of service.
We pay for it in the same way we pay
for our politicians to allegedly work for
us, and they, on our behalf keep the National
Health Service free at the point of
delivery.
I am writing this to open the
public’s eyes at the way EU law forces
Member States to reorganise their welfare
services, looking also at the affects
of free movement and competition
practices on health care. It tends to result
in national welfare institutions being replaced by
private providers. The process is not being discussed
by the public because it is not being debated openly
by our MP’s. What comes under “Welfare reform”
is not being led by welfare reform at all. The major
cause is that EU law as it stands authorises a great
deal more interference in welfare than has been
thought about. Our National Heath Service that developed
here in the UK after the Second World War
may be gone forever (if we do not fight for it to remain)
and there may never be a public discussion
about this but it may disappear without anyone realising
it
Welfare is perhaps the last bastion of nationalism,
but it is one nationalism that the vast majority
of people will most definitely want to keep, it
poses however, a problem for the European Union,
for how can the Union, that is dedicated to the removal
of national borders allow our welfare state to
remain as it is when other member state’s welfare
systems are not all free at the point of delivery? Are
WE the odd one out, yet again?
Even now, although people are concerned
at how many hospitals are closing and nurses and
doctors are being made redundant, have no idea
WHY this is happening, and even less understand
perhaps why I am putting the first point of blame on
to our involvement in the European Union, my second
point of blame is to the present Labour Government.
What happens to our Welfare system
brings the EU right into our homes because there
are very few people that get through life without at
least one spell in hospital. I have only touched on
the subject lightly because in everything else to do
with the EU, it will eventually require our hospitals
to be “liberalised”, “opened up” magic words,
“open to competition” taken over in the same way
that most of our great industries have been taken
over.
There are two choices, one, just stand
back and let it happen, or two, fight for your health
service as those before you fought to get it put there
for us all to use free at the point of delivery.
I can remember the day our National
Health Service was born. Although it was the Atlee
Government that created the National Health Service
(NHS) based on the Beverage Report in 1942 Aneurin
Bevan carried out the actual introduction of
the Service for the launch July 5th 1948. I never
met the man although I spent one whole
afternoon with Jenny Lee, his wife, in
my mid 20’s when taking part in a
fashion show. (Organised by the Local
Labour group) She was a remarkable
dynamic lady.
Before the introduction of the NHS,
we as a family used to pay hospital
‘fee’s’ of one (old) penny a week, but
at least we were able to have hospital
treatment as long as we were ‘in the
hospital fund’ club.
The NHS covers four separate
(once) publicly funded systems, General
Practitioners, Accident and Emergency, long
term health care and Dentistry. Since 1948 we have
all had the use of them and perhaps taken them for
granted far more than we should have done.
There has always been Private Health care
for those that could pay for it or prefer the privacy
provided by private care. It is usually paid for
through private insurance. NHS services on the
other hand are “free at the point of delivery” paid
for by our taxes and I understand the budget for
2006-7 is £96 billion. It employs over 1 million
people and is reputed to be the largest employer in
Europe if not the world, depending on who is the
teller! We, the people, by way of our taxes, employ
them all.
Things seemed to roll along fine until
1997, but the urge to join the euro by Prime Minister
Blair started the changes I am writing about here.
My attention was drawn to The Times (In 2003),
which reported that if (and we may not have that option
of “if” one day) we join the Euro, the European
Central Bank had warned Britain it might have
to give up its National Health Service. Even the Bolton
Evening News, May 2003 reported that, “Britain
would be forced to scrap the NHS if we joined the
euro, so warns the ECB, saying free health care
could be slashed to just emergency services”.
Also, “The ECB recommends jettisoning
the NHS in favour of private health care, saying
Britain’s aging population will send NHS costs soaring,
and euro-zone rules would not allow Gordon
Brown to borrow necessary funds to foot the bill”.
But hold on, this is a Labour Government
we are talking about and a Labour Government to
boot, that brought the NHS into being, it was their
pride and joy, yet we now have a Labour government
that wants to end our Sterling currency, join
the euro, has signed up to an EU constitution and
knowingly and quite deliberately is destroying our
NHS system into the bargain. How can I say that?
Because it is privatising our NHS “by the back
door”. I have read two quite separate papers that
refer to what they are doing as “Enron by the
Thames”, and, “an Enron accounting system”.
An Article written by Nigel Hawkes
(Health Editor) from The Times on Line (Jan 17
2006) “Women GP’s hit first by cuts in NHS”, the
first among many more cuts to be made, many of
which we each of us know about where ever we
might live in this Country.
The Euro Realist October 2006 Page 5
An informative booklet on the “Services Directive”
(A race to the Bottom) by Brian Denny, explains
how EU rules attack public services, jobs, pay, pensions
and collective bargaining rights”. Plain
speaking indeed. “Following the exclusion of
healthcare from the Services Directive, the EU Commission
immediately announced plans for a new
separate directive by the end of 2006 to open up
health services to free market competition. Not surprisingly,
the ECJ ruling have helped this process
along by using internal market arguments first
mooted in the Services directive.” If the EU does
not get their way in one matter, they will get their
way in another.
“Page 5”, “EU Health Spokesman Margaritis
Schinas said that the ECJ ruling on patient
mobility, ‘clearly states that there is scope for community
action to achieve public health objectives’.
He went on to claim that patent mobility was covered
under Art 95 of EU Treaties covering internal market
rules.
As already pointed out above, the ECB
report from May 2003
called on Euro zone members
to reform health services
and although we are not
in the Euro, we still have to
abide by the Stability and
Growth Pact (SGP). One
way round the removal of the ability to “borrow”
more money was to introduce Public Private Partnership
(PPP) or, Private Financing Initiative (PFI)
into the Health Sector and turning hospitals into
Trusts. According to Brian Denny, these moves
have already led to a cash crisis in the NHS and the
loss of over 7000 jobs.
The EU also wants more power over
healthcare, which does not surprise me at all. Alan
Milburn once said though, “As long as there is a
Labour Government, the NHS will be funded from
general taxation and health care available according
to need and not ability to pay”. I think he forgot to
mention that the Health Service as we know it would
be gone, that it would be slashed with hundreds of
excellent nurses and Doctors abandoned, Hospitals
closed, with not all medicines available to all.
Is this what all this is about? To come into
line with the ECB? So that we can abandon sovereignty
over our sterling currency and reserves or the
authority to control our interest rates? Only the rich
will be able to have peace of mind if they fall ill for
they will be the only ones that will be able to afford
to pay. The elderly, old and poor will no longer be
cared for. Vote for Labour?
According to the World Bank Policy Research
Working Paper 3860 March 2006 (By Jack
M Mintz and Michael Smart), “Incentives for Public
Investment under Fiscal Rules” (page 10) “To produce
health services, governments employ doctors
and nurses and construct hospital buildings. The
hospital buildings are obviously capitol inputs used
in producing health services and should be amortized
under capitol budgets and doctor and nurses
salaries should be expensed. The health services,
however, are arguably consumption goods to reduce
pain and suffering even though an element of public
capitol might be entailed if
As already pointed out above, the
ECB report from May 2003 called on
Euro zone members to reform health
services
current health services improve the long-run productivity
of workers (who later remit taxes to the
government). Some judgment is needed to determine
whether any health service expenditure should
amortise under public accounts since a majority of
health expenditures tend to be focussed at the end of
a person’s life”.
(Page 12) “The Maastricht Treaty contains
a provision requiring member states to avoid
running “excessive” deficits, whether or not they
have adopted the euro. A protocol to the treaty
specifies in turn that members’ fiscal stance is to be
judged by two criteria; whether the budget deficit is
less than 3 percent of GDP, and whether the total
government debt exceeds 60 percent of GDP. If the
Council determines a deficit is excessive, there is a
procedure to encourage its elimination. The Council
may issue warnings and impose deposit requirements
and, eventually, fines. The SGP corresponds
to the provisions of the Maastricht excessive deficits
procedure, but it clarifies the terms, introduces
monitoring procedures, and it gives the Council
greater teeth in the event of
violations. Under the SGP,
deficits may exceed the 3
percent level if the excess is
“exceptional, temporary,
and limited in size”. Some
discretion is accorded to the
Council in determining whether this provision
should apply”
(Page 13)“The UK has also moved to accrual
accounting for financial reporting. For budgetary
purposes, the UK Government focuses on two
main “flow” measures of the fiscal stance. (i)
adherence to the golden rule is measured by the
current budget surplus, defined as difference between
tax revenues and current public spending
(including depreciation): (ii) the government also
reports public sector net borrowing (PSNB). Both
measures are accrual-based concepts: the PSNB can
be contrasted with the previous use of the Public
Sector Net Cash Requirement (PSNCR), which was
essentially the cash deficit. “ In particular, proceeds
from privatisation and other asset sales are excluded
from the PSNB, but not the PSNCR. Both the current
budget surplus and the PSNB are cyclically adjusted
before the fiscal rules are applied”.
“These rules impact on public investment
spending. The UK for example is WELL WITHIN
the 60 percent gross debt limit specified in the
Maastricht Treaty (its own 40 per cent net debt limit
is surely more binding). Net borrowing in the UK is
currently about 1,8 percent of GDP, and substantially
less on cyclically adjusted bases. While an increase
in investment there is planned, it may be that
the UK Government’s reliance on largely offbudget
Public Finance Initiatives means that the
Maastricht deficit limit is unlikely ever to be more
binding than the golden rule policy” End of quotes.
Although this paper is mainly about the
NHS, and the mess we are in through PFI/PPP, the
latter two have been used in many areas, the London
underground for one major venture. Recorded in
Hansard for the 24th July 2006, Col 1387W A question
was asked about PFI Contracts. The answer
Continued page 6...............
Page 6 The Euro Realist October 2006
Our Health Service in Hock continued:
given was, “There are currently over 500 projects
that have been signed and are now in operation.
Around a further 200 projects have reached financial
close, but are yet to become operational. The
combined capitol value of all signed projects is over
£48 billion. Information on PFI projects that have
reached financial close may be found from the ‘PFI
Signed Projects List’ on the Treasury’s public
website”.
“At the time of the Budget around 80
projects were at the preferred bidder stage and
around 155 had yet to appoint a preferred bidder.
The estimated capitol value of these projects is
around £26 billion”. End of Quote.
I am looking at PFI as, ‘on the never,
never’. If I ran up hire purchase debts into the hundred
thousands, it would not just take me thirty years
to pay off, but it seems as if I might expect my children
and grandchildren to continue paying off my
debts long after I have left this earth. From all the
businesses that I have found, this Country will ‘be in
hock’ if not bankrupt, and what for eh? So that we
can either eventually join the euro, and/or stay in the
European Union and be governed by it forever?
How can one Government, a Labour Government at
that, that is supposed to be all for the people, run up
so much debt and what on earth for? Labour has
taken something very special from which each and
every one of us at some time in our lives, have been
glad the NHS is there for us, yet is prepared to see it
trashed just to remain in what is, without doubt,
about turning into a federal, political state and a totalitarian
state at that. Many MPs we now know,
(and can prove) knew that from before we joined the
European Community.
My poor father, a very strong true Labour
man, must be spinning in his grave. Mind you, he
would not recognise these men of Labour as the Labour’
he once so admired.
George Monbiot woke up to what was going
on in this field on 27th June 2002 when he
wrote, “PPPs are a Public Fraud”. He began his article
with “Poor visibility corrupts; invisibility corrupts
absolutely.” He wrote, and please remember
this was written in 2002, “ As the Association of
Chartered Certified Accountants (ACCA) points out,
the government allows public bodies to reclaim the
VAT on privately funded projects, but not on publicly
backed schemes, thereby favouring private finance
by 17.5 percent. National health Service
trusts have to pay the Treasury a 6 per cent “capitol
charge” on the buildings they own. Private builders
have no such obligation. The Government gives local
authorities an annual grant of 11.5 percent of the
value of the Public Finance Initiative scheme they
commission, but there is no corresponding sweetener
for publicly funded projects. Private financiers are
permitted to use “discount rates” way out of line
with inflation. This false accounting masks the appalling
value for money offered by private finance.
As the British Medical Journal (BMJ) report shows,
39 per cent of the price of PFI hospitals is incurred
by the extra cost of borrowing. Governments have a
better credit rating than corporations, so they can
borrow more
cheaply. As interest is levied across the 25 or 30
years of the project, small differences in rates contribute
vastly to the cost.”
He asks, “So why is the Government
forcing public bodies to fleece the taxpayer? In
1997, it claimed that the purpose of the PFI was to
reduce government borrowing. But PFI does not reduce
borrowing: instead it defers and extends it.”
One of the headlines used was, “The policy has the
potential to bankrupt the UK”, and I believe that to
be true. End of quotes.
How on earth did we get into this mess?
Under funding of the NHS to begin with? In the
mid 1990’s, under the Conservative Government of
John Major, a number of hospitals effectively opted
out of central NHS to become Trusts. Can anyone
else remember the waste of money on new logos?
At around the same time we started to see or hear of
hospitals and medical centres being built using PFI.
Which as we already know involves the building of
public buildings by private companies, which are
then “rented back” to the NH Trust at a higher
long-term price which is only to be expected because
the firms have to make a profit to stay in business.
Under the NHS, the taxpayer owns the hospitals
and paid the salaries. Where is our compensation
for losing that asset? We are expected to pay
far more now under PFI.
This disastrous PPP/PFI adventure has almost
gone off the scale, under New Labour. To me,
we are beginning to see ‘rationing’, we are being
kept fit, we have to lose weight (might we not be
treated if we are overweight?) We have to stay
healthier so we are discouraged every which way
from smoking. (Will we be refused treatment if we
DO still smoke?) Our children may not be allowed
the “Gob-stoppers” we once used to stuff our
mouths with because the “We are watching what you
eat” patrol are on the lookout, what the children eat
at meal times. (Animal farm was but a comic compared
to today’s lot)
In the “Health Unions Briefing for MPs”.
July 2006, it becomes obvious the Union are concerned,
for they “recognise that across England
(Scotland etc are devolved) NHS organisations are
being forced to make cuts which affect patient services.
Trusts have been told by the Government that
they have to pay off their debts by the end of the
year and are having to cut jobs and services in order
to meet this target”. “Nearly one third of all trusts
are in debt. There have been a growing number of
compulsory redundancies in trusts across England.
Although these have, largely, been dealt with
through freezing posts and natural waste there are a
whole range of measures taking place such as closure
of departments and severe cuts in education and
training, which will have a huge impact on standards
of care and services to patients, both in the short and
long term.”
Although there is a great deal more, I will
say ‘finally’ in looking to Hansard on the last day
before recess in the House of Commons is a mixture
of questions and comments from different MPs that
reveal what is happening (or not happening) in their
area re Health care and in the hospitals. It is not
Continued page 8...............
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Our Health Service in Hock continued:
only enlightening, but also frightening. It may well
bring anger in the revealing. The closing of wards,
beds and hospitals could be prevented if we came
out of the European Union now.
We could build and pay up front for the
hospitals we need if we did not have to obey EU laws
or pay our alleged “Share” of the EU budget that is
wasted, wasted, wasted. We could do what we liked
with our own money; we most certainly would not
have to be held back by the Stability and Growth
Pact. We would become a sovereign State once
again and our own politicians would have to do the
job we pay them for from the day they are elected.
The Union is still attempting to become the all-powerful
state it wants to be, it must become one without
the United Kingdom of Great Britain. The saying
“Better off out” is indeed true, for we certainly
know what it is like IN it.
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