The best way to pay for the NHS in future? Immigration

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November 6, 2014 by Paul Goldsmith

NHS funding

Simon Stevens, the Chief Executive of NHS England, published a report last week into the future of the health service, and announced that it would need £30bn more cash by 2020. In an outstanding article in the Observer this Sunday (click here to read the whole article), Andrew Rawnsley runs through the different ways in which this figure can can be raised by 2020 without bringing the rest of the country to a standstill. Rawnsley comes to a rather controversial conclusion, which is that the best answer is to encourage immigration into the country. It’s worth looking at how he gets there, because it is a very useful insight into the difficulties of running an ageing country.

Rawnsley starts by pointing out that during their recent party conferences, the Conservatives promised to “ringfence” the NHS budget (i.e. no promise of extra cash), the Lib Dems committed £1 billion more than the Conservatives and then Labour pledged an extra £2.5 billion. All of this is chicken feed next to what Stevens suggests will be needed.

Rawnsley also points out that, regardless of the misleading cover on his report – of a mother and a nurse and a newborn – spening on the NHS is mainly about trying to extend or improve the lives of the elderly. The average spend on retired households is nearly double the amount spent on non-retired households. The average cost of providing health and community services for a person aged 85 or over is around three times greater than for a person aged 65 to 74. Three-quarters of the NHS budget is spent dealing with long-term conditions.

Stevens’s suggestions of how to address this problem include the integration of health and social care (the NHS treats you for a broken hip but not for alzheimers – which doesn’t make sense), empowering patients and orientating resources more towards prevention and early diagnosis.

Stevens argues that if the NHS can be made more efficient, more innovative, more localised, more integrated, less hidebound by professional demarcations and more patient-centred then £22bn of the £30bn needed could be saved. This would be heroic and unlikely, still leave £8bn and STILL need to be done again in 2020.

There is no easy and no single answer to where this extra money is going to come from. Basic economics reminds us that spending more on health means we have to spend less on other things (called ‘opportunity cost’). We have been doing that already under the coalition government’s austerity policies.

The Labour politician Frank Field suggests we set up a “mutual fund” to pay for health and social care financed by national insurance contributions. Other Labour politicians have also pointed out how popular Gordon Brown’s extra penny on national insurance to boost NHS spending was in 2002. That may be so, but it was because it was a one-off and politicians from all sides would be wary of trying it again.

Labour’s extra spending pledge on the NHS is part funded by windfall taxes on tobacco companies. Further cash could come from other “sin taxes” such as a new tax on foods loaded with sugar and salt – because the most costly and growing burden on the NHS is obesity. These may work for a while, but eventually, people may give up cigarettes and fatty foods completely – great for health campaigners, not good for the Treasury.

Then there is the idea of rationing healthcare. I feel myself sucking air through my teeth as I type it. Yet we in the UK already do it through the fact that we are near the bottom of a healthcare table of 11 prosperous countries when it comes to timeliness of care (yes, queuing and waiting lists IS rationing). Another way of rationing would be charging for GP visits and payments for an overnight stay in hospital with the state helping out those with lower incomes pay for it. But “free at the point of delivery” is far too embedded in Britain’s conception of the NHS for a mainstream politician to go there. (Which is why only UKIP have mentioned it).

So Rawnsley is left with one place to go. We should welcome more migrants into our ageing country. Here are some facts. Migrants into this country are typically younger than the indigenous population. Migrants make less demands on the health service. Migrants contribute a good deal more in tax than they take out in benefits. The extra funds that migrants bring in can be spent on the NHS.

Having written that. I’m just going to sit back now and think of the name of a political leader who is going to suggest in the current political climate that the most palatable way to meet the NHS’s funding needs is to have more immigration……….

 

 

 

 

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4 thoughts on “The best way to pay for the NHS in future? Immigration

  1. DH says:

    Bring back Communism I say! Government for the people by the people!

    If Gordon Brown’s claim that the “extra penny” tax would solve the NHS problem…then I advocate that we all pay five penny’s more and sort out the rest of the welfare state – social services, education, affordable public transport and the like!

    But maybe UKIP have a point, “free at the point of delivery” is very much the norm in the rest of the western world…why not in the UK?!

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    • Not sure about your final UKIP point. Isn’t it so that “free at the point of delivery” ISN’T the norm in the rest of the western world? The answer in that case is that we are wedded to and proud of the concept of our NHS and we hold it dear and the concept of it not being free at the point of delivery is very unlikely to be let go of.

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  2. Peter weitzman says:

    If migration to the uk increased surly it would only be a short term solution. If this occurs then after thirty years the many benefits will subside and the United Kingdom will of reached maximum capacity for population. Even now considering the population density and land that could be used we could maybe support ten or twenty million more. The housing prices will surge, only a technological bra through in agriculture and housing could make this long term and with the uk’s many restrictions on foods and construction this is unlikely to occur.

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    • Peter – your point about the UK’s restrictions on construction is spot on. Although we live in a crowded area the truth is that only 10% of the UK’s land is actually urbanized. We COULD build a lot more, but we CHOOSE not to. Planning restrictions are the main culprit for that.

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