Why we love the NHS - Daily Telegraph 4 October 1999

One of the great puzzles of our time is why our voters support institutions which make them seriously worse off. I am thinking of the National Health Service and our Universities - both of them effectively nationalised industries where the evidence shows our impoverishment by the smothering and apparently generous hand of the state. There are a few brave private sector players competing on the margins of both these industries; some private sector hospitals, for example, and one private university (the gallant and excellent University of Buckingham). But they are cruelly constrained by the free services provided by their state competitors; they can only compete for services the state refuses to provide.

The consequence of this de facto nationalisation is the poor service we now associate with other (happily defunct) nationalised industries like steel, gas, electricity, and telecoms. Compare our Universities with those of the USA; we educate a far smaller proportion of our children at university, but what should worry us most is that we cannot match their Harvards, MITs and Chicagos because we cannot afford any more to pay the best rates or provide the best facilities. Compare our performance in health care, as I did in these columns a few weeks back, and you find that in tackling the serious illnesses which we fear most we compare exceedingly poorly with the USA.

If you look at the cause of this worse performance, one stunningly crude fact emerges; we spend far less. Americans spend more than twice as much (14%) of their national income on health care as we do (at 6%); and with two thirds of their high school graduates at university, against our one third, it is much the same story for universities. The reason for this in turn is that a lot of Americans reckon to pay privately for these services. Most take out health care insurance and many pay to go to private universities.

Here a tiny minority of UK citizens pay privately for an undergraduate degree - basically the UK students of Buckingham alone. Very few insure their health: about a tenth of the population is covered by private insurance - and most policies piggyback on the NHS, specifying they will only pay if the NHS does not provide within some specified period. Apologists boast how well our NHS 'holds down' UK health spending: should we laugh or cry?

We may not get obviously poor value for what we spend; these industries are staffed by fairly dedicated, weakly unionised people who are subject to all the rigours and tedium of public sector audit. Most of them also like what they do; and there have been big increases in 'productivity' in both sectors, in so far as it can be measured. No, the basic problem is that because of a state monopoly of funding we drastically underconsume services that the relatively free market like the USA shows people want in great profusion.

It is as if we had retained our wartime regime for the food industry; we would find that we consumed much less food in far reduced variety, compared with what do today. No one would put up with that. So why with nationalisation of health and higher education, industries of at least equal importance?

One possible reason is that they do not know the facts. When the government's propaganda machine is trying to pooh-pooh them, maybe Professor Bosanquet's NHS booklet for the Adam Smith Institute and the fulminations of our leading vice-chancellors will escape people's notice. Maybe; but our chattering classes ill-informed? Surely not.

Another reason might be that individual voters are indeed frustrated but can see no way of getting the co-ordinated action that is needed to change the system. No voter is going to pay for health or university when he can get them free; he might agree it would be better if the system changed but how? Perhaps, but if so, these issues should resonate in political debate; instead we hear an embarrassed silence from public opinion on universities and a freely-declared love for the NHS.

No; the true answer is crude self-interest from the floating middle class voter. There is ample evidence (for example in The Strategy of Equality by Professor Julian Le Grand of LSE) that the middle classes are the biggest beneficiaries of public services because they know how to work the system; the family doctor comes to dinner and will fix them up with the right consultant and get them a bed when the chips are down - quite wealthy people have told me with tears in their eyes how wonderfully the NHS sorted them out. The universities too are chock full of lecturers who like middle class kids ready to do some work.

The interesting contrast is with secondary education where the state has made such a mess of things that many (16%) go entirely private; many others use more than 1000 formerly grant-maintained private schools, now partly funded by local authorities. Ironically where the state is efficient nationalisation is more thorough. Wherever the state provides something free that is half decent the middle classes move in; and once in, woe betide the politicians who suggest change - 'informed opinion' will soon make mincemeat of them.

This should make us wary of spending more on these public services: that would reduce even further the incentive for people to pay privately. Better if they are rationed severely and brutally to the vast majority who ought to be paying for themselves; to this stick could be added the carrot of tax relief.

But fear not. In spite of middle class control of media comment, there will be change - because floating voters are changing. Nowadays they are Sun-readers and they are not good at playing these systems. Sooner or later they are going to tumble to how badly they are being ripped off by the old middle classes - and bay for change.
If only the Tories had not betrayed these natural supporters in the last recession, they would be able to mobilise them more easily in support of reform of our last nationalised behemoths. With New Labour busy bribing the old middle classes, here at least is a project for Tory revival which we should all support.

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