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June 04, 2006

Ain’t That the Truth

Nick Cohen:

What is going on in the NHS exemplifies his argument that New Labour is a creature of the 1990s that allowed itself to be overawed by the private sector without ever understanding how the private sector makes its money.

An accurate description of the problem. Then this:

People aren't thinking about the dangers for the British centre-left that this epic waste of public money is raising. At root, left-wing politics rests on the belief that collective provision is a better and fairer way of organising society than a private free-for-all.

If collective provision doesn't work, if taxpayers on modest means realise they have been forced to pay billions and got precious little in return, then the left will lose.

One possible answer is that if the left loses....well, ahhh, diddums.

A more sensible one would be to look at why certain types of collective provision don’t work yet others do. The Swedish education system is said to be vastly better than our own. Certainly, that it promotes social mobility more than ours, also seems to create greater social cohesion. These aren’t the things I particularly worry about but they do seem to be of some importance to the centre-left.

The Swedish system is also a pure voucher based system...paid for by the State and thus collective provision of a sort...and actually supplied by any two qualified teachers who wish to set up a school. Only a tiny amount of it is so supplied, of course, but  that competetive pressure seems to work.

The French health care system (or Singapore, or Switzerland, different again but highly effective) is regarded as one of the world’s very best. The State system (funded by a charge on wages which doesn’t actually sound all that sensible) pays only 75% of the costs of treatment (except cancer where it is 100%) and most have further private insurance to cover the excess. But there is even then a direct link between paying for and consumption of health care. We, however, must never look to such systems because the NHS (The Wonder of the World it is!) is and must remain free for all at the point of use.

Y’all want collective provision? Fine, carry on, it’s your choice after all, but is it really being too extreme to ask that you look for the effective means of such, raise the level of debate to take account of other proven to work systems, rather than simply rut in the mud of our own failed attempts?

June 4, 2006 in Politics | Permalink


I think it's a size thing not particularly a method one. Vodafone have destroyed value of about 100bn pounds in the last few years, equivalent to say 6% of UK GDP (not that you can compare GDP and wealth, but it gives an order of magnitude), despite being privately owned.

Posted by: Matthew | Jun 4, 2006 10:02:41 AM


Large does often equal inefficient. But, in a free market, that's OK.

Because if someone stops looking after their customers, then their customers can go elsewhere.

Posted by: Tim Almond | Jun 4, 2006 2:45:56 PM

Voda is a bit of a special case, as whilst doing that it's had operating profits of ~£9 billion a year and positive free cashflow of ~£6 billion a year.

Getting on-topic, I would say New Labour's problem is that it is obsessed with methods that feel like the private sector, whether or not they have anything in common with its strengths, and applying them to the state without any realisation of why they aren't already there, nor with why the state works like that.

The whole thing is a monument to Goodhart's Law.

Posted by: Alex | Jun 4, 2006 3:29:13 PM