The Government was one hundred per cent right to make a big announcement on healthcare. This column has been making the case for an NHS announcement for a long time, calling on the Government to make the last Budget an NHS Budget. The opinion research is completely unambiguous: polls have put the NHS at the top of public priorities for many months and anyone that has run any political focus groups in recent times will know the public have been obsessed about the NHS and its pressures for at least two years. Furthermore, as Paul Goodman highlighted over the weekend, Vote Leave road-tested a simple NHS policy in a national referendum and found it helped them win.
But how will this particular policy play with the electorate? Let’s assume, after a few days, that the public has been told three things: (a) much of the massive new spending will be paid for by a (virtual) end to contributions to the EU; (b) it will likely need some new tax rises; and (c) some of the figures have yet to be worked out and therefore the exact nature of the tax rise won’t be known for some time. This is position we’re in now.
Barring significant change, and assuming minimal friendly fire from anti-Brexit rebels who can’t stomach anything positive being linked to Brexit, we should assume the policy will be very popular in the short-term. While voters disagree on why the NHS is under such strain – with Conservatives likely to blame immigration, and Labour voters likely to blame cuts – pretty much everyone agrees there needs to be higher spending on the NHS. (Incidentally, as I have pointed out before, the NHS often tops the list of priorities for young voters too.)
Furthermore, there is currently little evidence, despite long-term wage pressure, that most people feel desperately over-taxed. Jeremy Corbyn’s rise is in part a reflection of that fact: people seem not only to be comfortable with the tax burden as it is, but they are also open to the idea there might need to be a specific NHS tax to boost spending levels. The Government should probably have made the point that a ring-fenced NHS tax might be necessary to carry the spending burden, but it still has the opportunity to do so. There is obviously a caveat here: people will likely tolerate slightly higher taxes, particularly if most of the burden falls on “the rich”, but the IFS are warning we could face significantly higher taxes. It seems unlikely that the Government will carry public support as a whole if people think they’re going to be paying more.
It would be wrong to suggest that the public aren’t alive to the risks of just spending more money on the NHS. In focus groups, while people are clear the NHS needs more money, a very significant minority of people volunteer unprompted the need for reform. They talk about levels of waste, mismanagement, excessive bureaucracy and ludicrous contracts with suppliers of services. These voices don’t outweigh those that want more spent, but they’re nonetheless audible.
The announcement of much higher levels of spending is likely to increase the number of people that raise these concerns – and particularly if they personally face higher taxes. The public are perfectly capable of calling for money on one day, but complaining about levels of waste and mismanagement the next. After all, we saw this in the early to mid-2000s after the Labour Party’s massive injection of money into the NHS: while people were ultimately supportive of the decision, it sparked great concern about whether the NHS was a black hole.
However, it’s hard to see, necessarily, that this shift will be bad for the Conservative Party. It’s unlikely they will be directly criticised for perceived waste. People might come to question the wisdom of existing spending without reform, but they will almost certainly not blame politicians for giving the NHS and indeed the electorate what they called for. Indeed, it might be that the people become more realistic in the future about what cash injections can do.
How should the Conservatives exploit the opportunities this announcement opens up, and how should they minimise the difficulties? It seems unlikely they’ll be able to say much more about the Brexit dividend any time soon, although it’s not impossible. So, firstly, they need to bring some sort of clarity to what it might mean for taxes, ensuring that any new taxes should be both ring-fenced for the NHS, targeted at “the rich”, and with the equivalent of sunset clauses. Secondly, they should start making it clear this cash injection requires the NHS to make changes itself and that internal performance must be improved.
Overall then it ought to be a medium-term winning policy for the Government. And while I am personally sceptical about making massive announcements just to negate the power of your opponents, it’s obviously true to say this blunts one of the Labour Party’s biggest attack lines. Of course, Labour can call for even higher levels of spending, but it still makes it hard for Labour to smash the Conservatives over the head on the NHS as they have in recent times. The Conservatives will go into the next election with this great advantage. (Incidentally, it was interesting that the Evening Standard were highly sceptical about the policy yesterday, even though George Osborne must have seen the power of the party’s pro-NHS campaigns in the late 2000s).
A final word. It’s hard for free marketeers to stomach this policy. Perhaps the Government has gone too far. But we also need a reality check. There is zero chance that the public are going to back any meaningful reform of the NHS any time soon. People simply don’t think about its failings or the cause of those failings like we do. There are other battles that need to be fought; reforming the NHS is for another time.