Labour would fix health

From time to time I moan about our collective inability to address the fact that we cannot have a proper health service unless we are prepared to pay for it. A collective inability which includes our political parties. Then a day or so ago, I got an email from Team Labour – a name I might say I do not much care for. Far too much teamism about when I left the world of work – the top of which is snapped above.

Amplified in a piece at reference 1, from just about a year ago, which tells us that ‘… Scrapping the non-dom scheme could lead to a £1bn boost to the exchequer, Labour claimed citing research by the EU Tax Observatory…’.

From which I turn to reference 2, which tells us that we spend about £150bn a year on the NHS in England, with additional chunks going to the three devolved administrations covering the rest of the UK and with the wording suggesting that capital expenditure, for example building new hospitals, is also additional. According to ONS at reference 3, the total spend on health in the UK was close to £200bn in 2017 and so is probably rather more than that now. Of this, around 80% came from taxation.

So Team Labour, while probably not actually telling me untruths, is suggesting it will fix major problems in an operation with a budget of more than £150bn with a sticking plaster of £1bn. And I dare say that is an optimistic estimate. Not that I am disputing this particular change, just that it is nowhere near enough. So where is the rest going to come from?

One possibility, already mooted in these pages, is to revive the medieval taxes of tenths and fifteenths, originally levied as that proportion of moveables, but perhaps extended for present purposes to assets generally.

Which if seriously suggested, might cause a bit of fuss in the media, most of which is owned by people with plenty to lose. So turning to reference 4, I rapidly turn up the table included below.

From which it is reasonably clear that if you want to raise serious money you have to do something with some combination of Income Tax, National Insurance Contributions and VAT. Which everybody pays, albeit with an element of regression, with the higher paid paying more than the lower paid. My point being that raising a few quid by bashing the rich might make you feel better, but it is not going to fix the NHS. To do that we all have to chip in – and it is about time that we all understood that.

A bit of detail

Turning to the numbers that Team Labour give us, £1bn amounts to £50,000 for 20,000 items, which might be about what it costs central funds to train a doctor or a nurse. It might be about what an entry level doctor or nurse costs central funds in running costs.

I have failed to find out what it would cost to meet the junior doctor’s large pay claim in full. But, very broadly, Wikipedia says that there are around 70,000 of them in England. So for £1bn you could give each of them around £15,000, quite a good lift if their average pay were £50,000.

In the course of not finding out, I came across the website at reference 5, which I must look at more carefully. It is run by a charity and its objectives look very worthy, but is it really something to do with the Daily Mail or Newscorp?

Conclusions

Health is a big and complicated business. Getting a grip on where the money goes and what more might be needed is correspondingly complicated, even with the resources of the Internet or the Financial Times at one’s fingertips. Do we trust our political parties with all these sums? 

It is certainly a pity we can’t just trust the boffins at the Treasury to check the sums of the boffins at the healthy organisations. That is, after all, what they are paid for.

But I would take some convincing that a large infusion of cash is not what is needed to put the NHS back on its feet. A lot more than the £1bn a year on offer in my email.

References

Reference 1: Rachel Reeves promises Labour will close ‘non-dom’ tax loophole: Shadow chancellor says it ‘isn’t right that those at the top benefit from outdated tax perks’ – Rupert Neate, Guardian – 2022.

Reference 2: https://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget. 

Reference 3: How does UK healthcare spending compare with other countries: An analysis of UK healthcare spending relative to comparable countries, using data produced to the international definitions of the System of Health Accounts (SHA 2011) – ONS – 2019.

Reference 4: https://commonslibrary.parliament.uk/research-briefings/cbp-8513/. 

Reference 5: https://fullfact.org/health/.