Published: 13/02/2003, Volume II3, No. 5842 Page 19
It is always a mixed blessing when health surfaces at prime minister's question time. But last week's attack by Iain Duncan Smith on Tony Blair's broken promise not to raise health taxes did contain a silver lining, albeit a lining buried within the cloud.
A 1 per cent increase in national insurance contributions on 1 April is equivalent to a 10 per cent rise in social insurance costs for French and German business or a 13 per cent hike in private medical insurance in the US, Mr Blair sternly told the Conservative leader.
This is true and, if George Bush was not busy threatening what remains of the Iraqi healthcare system, he would be enmeshed in the 'perfect storm' rising at home. Medicaid bills for the US's uninsured are soaring again. So are the numbers of uninsured, as small firms stop insuring staff. Health's share of US gross national product has just topped 14 per cent.
All interesting stuff in a week when ministers have again grappled with the respective roles of the state and markets. So what was my silver lining? That 13 per cent figure Mr Blair cited came from page 16 of Gordon Brown's 11,000-word speech on that very topic. Not many people know that. But Alastair Campbell, Mr Blair's media rottweiler, had read - and approved - the speech in advance.
That does not kill off speculation that Brown and Blair are at odds again.Nor does it negate suggestions that Alan Milburn's speech on the 'new localism' amounted to an assault on Brown for its proposal that foundation hospitals might - one day - be allowed to raise cash through bond issues, ie loans from the private sector, in the US fashion.
What it does underline is that, for all their differences of detail Messrs Blair, Brown, Milburn and even education and skills secretary Charles Clarke are broadly moving in the same direction, in the face of critics who say they are all still 'big state' advocates.
What Mr Brown's 11,000-word text boiled down to was that the right is wrong to say that markets are the answer to all problems of social and economic problems. Thatcherism had often replaced state monopolies with private ones. Equally, the left has been wrong for 100 years in saying the answer to the failure of markets is nationalisation.
The left's job in government should be to make markets work better.Yes, New Labour ministers should work to improve competition, not to replace it, not least by setting standards, regulating services and improving the knowledge on which consumer choice is made, the chancellor declared.
Mr Brown cited health as a prime example of a flawed market. The average cost of US health insurance is now $100 a week and excludes expensive treatments whose costs are 'pooled' in the NHS. On the one side consumers (patients) lack expert knowledge and cash, on the other the medical profession has to anticipate all sorts of eventualities that are hard to plan for.
Mr Milburn would agree with all that.As we watch stock markets around the world melt down in response to the collapse of the selfevidently ridiculous dot. com boom and telecom bubbles of the 1990s, most of us can recognise lemmings - nattily dressed in red City braces perhaps - hurling themselves and our pensions over the cliff.
What was striking about Mr Milburn's speech to the New Local Government Network was that it also moved at a stately pace towards the same conclusion as the chancellor: decentralisation of control over the NHS is vital to its more efficient and fairer operation.Whitehall does NOT know best. Charles Kennedy, who claims localism as a Liberal Democrat idea, said much the same last week.
Surprise, surprise; Mr Milburn is clearly more aware than Mr Brown how difficult this will be to sustain.He calls for 'real localism', with local ownership and accountability of community-owned hospitals, a widespread EU model where diversity of healthcare is compatible with non-market solutions. The brooding Mr Brown reads more like a man paying lip service.
Yet they were all attacked, by The Economist and by pundits in the Financial Times for suggesting that health consumers are any more ignorant than buyers of other products or that market solutions are not the answer. I disagree, but when they tease Mr Brown for exempting the hospital private finance initiative from his strictures on market failures, I accept they have a point.
Gordon likes the private finance initiative because the capital costs are not charged to his own budget.
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