Whatever Happened to the Family Silver? or, How We Sold the State and Where It Got Us

BELIEVE it or not, I have a plan for these blogs.

And part of that plan was, this week, to write about Michael Gove – truly a pygmy among dwarves if ever there was one (and there was. It’s him) – and the future for education under his raptor-like gaze.

But a couple of things came up over the last week to change my mind.

First, in a remarkable move, Richard Flint, chief executive of private water firm Yorkshire Water claimed there were ‘too many’ water companies, making it ‘harder’ to supply homes with water.

Now, I am not a monster. My first thought, as I’m sure yours is, was ‘Oh, you poor, poor baby. Come here, let me hold you, stroke your hair and coo soft reassurance into your tiny, shell-like ears, kiss the tears from your golden cheeks and massage the stress from your furrowed brow.’

After I had sat down and wept salt tears at the sheer unfairness of it all, a second thought occurred to me. You see, I think I know what we can all do to free young Richard from his Gordian trial…

But we’ll come back to that.

The second was the announcement that 12 – that’s 12 – areas of the UK have such poor air quality that the EU is set to fine us several million pounds. (London, which is NOT one of the 12, as it has been given longer to reach the EU-set targets, has the worst air of any capital city in Europe, so it’s nice to know we still lead the world in one area).

The quality of air in the 12 regions is so bad – due mainly to car-use – it’s likely to cut life-expectancy, on average, by eight months.

Not only that, air quality causes health problems which cost the UK £20bn per year – more than double that estimated to be caused by obesity.

The coalition, never a government to take its eye off the main prize, asked if it could have ‘more time’ to meet the targets. Because it’s the fine  that’s important, not the impact on public health or the wider environmental damage this hints at. So, as ever, well done there.

Thing is, one way we could help sort that out is if we reduced bus and train fares. That way, people who need to travel could hop on a bus or a train, rather than in their car, cutting emissions at a stroke.

So, why don’t we just do that? Saves money, and saves us a fine, even cuts congestion in inner-city areas, and people live healthier, longer lives so they can work even longer before their two weeks’ of pension before they die. Bingo! Trebles all round!

But, sadly, no. Not bingo. No trebles, for anyone.

Because the bus companies and train firms are privately run. So the government (or local authorities) CAN’T cut their fares. And bus and train companies are RAISING their fares, because that will help make it more expensive to travel anywhere and encourage people to use their cars more. And it means we can get fined…

The Privatisation Experiment

So how, exactly, did we manage to stumble from a situation in which the government – and by extension we, as taxpayers – owned the means by which we travelled around the country we live in, the water which fell from the sky (and ran through our taps in our houses), and, for that matter, the electricity which lit lights to read by, and powered irons to iron with, cookers to cook with, and TVs to um, TV with, into one where we own none of them?

Starting in 1986 – and to all intents and purposes ending in 1994 – Thatcher’s Conservative Party privatised the previously publicly-owned railways, bus services, water, electricity and gas suppliers.

There is some debate as to why it did so.

On the one hand, the argument used by the government was that privatisation would offer ‘choice’ to the consumer (this clip: www.youtube.com/watch?v=6T2zUEiVQU4 offers an analysis of this idea).

It was argued that ‘choice’ would drive prices down and improve services, as companies driven by the need to make profits would continually improve and offer services for decreasing sums of money to attract more custom. The fact that after a certain point – that is, when a very small number of firms have ‘defeated’ the competition – there is no longer a requirement either to improve or to lower bills for the consumer was, strangely, absent from this line of arguing.

It also argued that ‘experts’ would be better placed than the government to run such services, and that government’s involvement in running them made them expensive and inefficient. Again, the elephant in the room – that it was experts who already provided these services, not MPs, and that MPs’ only role was to be directly answerable to the people for the delivery of such services – was also politely ignored, because EVERY idea is worthy of the same respect, even if it is founded on a basic misunderstanding of reality.

But it would be negligent of me not to include here the other possibility: privatisation is just a part of the wider monetarist economic ideology.

Monetarism teaches that the state – which is, so the argument goes, hopelessly bloated and inefficient – should be removed from all areas of public life. That the individual should use their own skill and judgement to make all of the decisions which affect them.

It also teaches that the free movement of money in society is of itself a good thing, and has the added benefit of producing economic growth as a consequence of its movement.

The problem is, because it teaches the state should not interfere with people’s lives, it follows that the state cannot inject cash into the economy ‘to get things moving’ as it were (ironically, Keynesianism, which Thatcher and others replaced with monetarism, allows exactly the state intervention which would inspire growth. A topic for another time).

In order to help money start moving freely, Thatcher tried (amongst other things) tax cuts, meaning in theory that people could spend more money on consumer goods, thus helping the private sector to grow.

But she had also found that her state-reducing policies had tripled unemployment, meaning the government had less tax revenue AND had to pay more in benefits than a ‘large’ state would do.

Suddenly, the state was in financial trouble. In response, she turned to the publicly-owned services. Their sale would give the state a cash injection, which could then be passed on through low taxes to people, who could then spend the money, etc., etc., etc. (There is of course another massive flaw in this argument, namely, if you sell off service provision to private firms, your tax cuts are not really giving money to people to spend on consumer goods. Rather, you are asking them to pay money into a new area of the private sector, ‘services’, which previously existed in the public sector).

Of course, each of these services also cost the government money to run. But in all honesty, this is such a transparently half-argued case that it can be answered in one sentence: If a private company can afford to deliver a service by charging for it, so can the state.

In any case, ‘choice’ was the one-word catchphrase, with the added benefit of the government receiving cash, services costing less for the consumer, tax falling for the taxpayer, and service provision being operated in a more efficient, less wasteful manner.

In exchange for these benefits, we gave up control over how transport services were run, how electricity was produced, how and when water was available and the knock-on effects, such as pollution, involved in each service.

Roughly a quarter of a century on, how’s that gone?

Gas

I’m starting with gas, because a) it’s the simplest, and b) it was one of the first services to be privatised, in 1986.

Now, to be perfectly honest, if the world had ended, as all kinds of visionary prophets (and people who believed in the Millenium Bug) predicted, in the year 2000, the privatisation of British Gas could have been judged an unmitigated success.

The problem is, for its first 14 years, this privatisation was not really a ‘privatisation’ in the classic sense of the word, at all.

In 1986, the government floated British Gas on the stock exchange. The sale of shares raised £9bn in today’s money. The new firm was split into two, Transco, which worked on extracting gas, and safety, and Centrica (which kept the name British Gas), which delivered it to the public.

By 2000, no faults in supply had developed, Transco had proved capable of dealing with ‘leaks’ and other scares, and, perhaps crucially, the average gas bill for consumers had dropped 32 per cent.

In fact, the only real complaint to be made about the privatised British Gas was its advert, in which someone sang ‘E-e-e-e-lectricity – that’s the beauty of gas’ which was a bit like if I opened a shop called Hats and Cheese and sang ‘Chee-ee-ee-chee-ee-ee-ee-eese, that’s the beauty of hats’. Even so, I admit this was a small price to pay.

But there was NO competition. So the cut in bills and sensible service provision was achieved despite the central argument of privatisation – that competition was necessary to cut bills and provide an efficient service – never having been tested.

Fortunately, in 2000, Labour stepped in and ‘completed’ the privatisation process. Today, as ‘over 18’ (as the gasguide.co.uk website helpfully puts it. Keep it vague, kids, keep it vague…) companies compete for your business, the average gas bill is 60 per cent higher (on top of inflation – as with all figures I use in this blog) in real terms than it had been in 1986.

So, 14 years of no competition, a 32 per cent drop in price for the consumer. Twelve of competition, driving prices down, and we’re 60 per cent worse off every time a gas company sends us a letter than we would have been if we’d just left it all alone.

As a footnote, gas charges rose a further 20 per cent in 2011. A victory for the private sector, n’est pas?

Buses

Before we look at buses, I’d like to make something clear: I think that inner-city bus and rail transport should be free. In fact, I think all public transport operating at peak times should be free.

This is not, I admit, my own idea (you have Myles Na Gopaleen to thank for that. Look him up. He’s good…). But basically, it comes down to this: We are told that employment and business are good. People have to travel to work, in order to do their jobs. The beneficiaries of such travel are the companies which employ people to make them money, and society as a whole, which gets to benefit from the resultant economic growth employment and production brings.

But across the country, people appear to be expected to spend a portion of their wage for the privilege of travelling to work, to earn money which, in part, is spent on travelling to and from work.

Now, I don’t really mind how free travel to and from work is achieved. But my suggestion would be this: Companies buy bus and rail passes (bikes for those who live close enough to ride each day) for their employees, which are valid for the entire journey to and from work, on the days on which each employee works.

Or: companies pay their employees not only for their scheduled work hours (let’s say 9-5) but also for the time it takes to travel to their place of work – but pays them EXACTLY the amount the train or bus fare to and from work would cost. This payment would be clearly marked as a separate payment on wage slips, and could be paid directly to bus/rail operators if employees wish.

People in both these scenarios can of course choose to drive instead if they wish, but in that case they voluntarily forego these payments. Instead, they are paid 9-5 as at present.

Or, the government could choose to renationalise bus and rail services, and accept that from 7am-9am, and then say 4.30pm-6.30pm each weekday, any local services are the realm of commuters, and are non-chargeable services (passes would have to be issued to firms which have night- and weekend-workers).

This would cost a little money (though, as we will see in the Rail section, that’s achieveable either by companies, or more easily if public transport is renationalised), but the advantages are obvious: fewer vehicles on the road, cutting congestion and pollution, and the payment of workers for the time they actually spend in a working day, as opposed to the time they spend at their desks.

All off-peak journeys would be charged for, as would all inter-city travel by bus or rail – employees have to be paid, vehicles and fuel bought, improvements made and maintenance carried out. Though again, these things become far easier if both bus and rail travel are re-nationalised.

The only thing which saves the privatised bus service from public wrath is, I would humbly suggest, the absolute failure of privatised rail.

The national bus service was broken up and sold off in 1986.

At first, the competition this generated caused the so-called ‘bus wars’ in which companies sent buses on the same routes, at the same times, to try to ‘win’ business.

This manufactured inefficiency eventually righted itself (oh, the glorious self-regulating market!) and today we have roughly nine companies providing services across the UK (though this in itself raises a question. If the UK is a big country, and there are nine companies running its bus services, how much competition can there actually be? The only way you could change company is by moving house. Bus users are as much a ‘captive audience’ as they ever were).

And how have they done? Well, since privatisation, bus use has fallen by 37 per cent (in fairness, it was already falling, but not at anything like the same speed), bus fares have increased by an average of 40 per cent and the number and frequency of services has plummeted. Next year, a 20 per cent increase in fares is planned.

Bus companies currently receive roughly £800m per year in subsidies, paid by the taxpayer – itself a curious version of a ‘private’ industry, though in many cases, as we will see, this money appears to be the difference between an abysmal service and no service at all.

Within bus companies themselves, the rate of pay for drivers has dropped 16.5 per cent, compared to an average wage increase across the UK of 19.4 per cent, while bus conductors are no longer employed in most places, an effective 50 per cent wage saving per bus right across the country (for a far better assessment of this last point, head for Will Hutton’s excellent The State We’re In).

So, bus companies are paying less to their employees, and charging far more for a massively reduced service (fuel costs have increased, undeniably, but bus companies receive a fuel tax rebate, so they spend less per litre of fuel than you, despite repeated announcements, many of which I covered as a reporter, that ‘fares must increase because of fuel duty increases’. No, they mustn’t. It’s an excuse to make more money, in the hope no-one will check…)

And what of the subsidies?

Well some are well-intentioned government attempts to improve fuel efficiency with newer vehicles – though these should surely be paid for by a private firm? Otherwise, the government might just as well take the companies back.

But it should be noted that every local authority across the country pays private companies to operate ‘subsidised services’. For those two words, read ‘any off-peak or weekend service outside of a very small area within a city centre’ and factor in the fact that the reason private companies refuse to run these services, for example routes to shops from remote country villages, is not because they will lose money by doing so, but because they won’t make high enough profits from them. Without subsidy, in effect, there simply wouldn’t be buses for anyone a private bus company deems to be insufficiently profitable. And this is why public services should not be owned by private companies.

Equally, the provision of free bus travel for pensioners is not paid for by private bus companies. It’s paid, in full, by the government. It may be unfair to call that a ‘subsidy’ per se, but it’s one of the best things about the modern bus service, and it’s paid for by you, not the people who make money from running bus companies.

The money these firms make, sadly, goes not on improvements, but on ever-increasing wages for private business owners – some of whom are, perhaps, shifting that cash out to Guernsey before it can be taxed at UK rates – and shareholders. We’ll come back to this when we talk about Rail.

Water

Any of you who know me, know that from December to March this year I lived and worked in Sirte, Libya. This isn’t the place to talk about what had happened there, but I would just like to mention one interesting thing I discovered when I was there: water is free for the citizens of Libya.

Now I’m not saying Ghaddafi was a good man, or we should emulate his regime. I’m just saying that in Libya, a country which is more than 90 per cent desert, you turn on the tap, clean drinking water comes out, and it’s free. No-one pays for it. I even saw people using hoses. To spray water at stuff, not as a kind of plastic ‘spider zoo’, like here.

Water, I’m pretty sure we can all agree, is a basic necessity for life on this planet. It’s also (and I’m sticking my neck out a bit here) good to be able to have a wash regularly.

And in all fairness, it’s not as if we’re short of it here. It falls from the sky (seemingly 97 per cent of the time) and no-one’s charged for that.

On the other hand, I freely concede that its transport and treatment costs money, as does employing staff to perform those tasks, make sure everything runs as it should, and improvements can be made.

The problem is, well, it falls from the sky. Every day. And yet we’ve had hosepipe bans in some cases from a remarkably wet April up to and including the wettest June on record. This isn’t really acceptable.

Water privatisation was pushed through in 1989.

Before this, water supply was run on a local basis, by local authorities. I’m not painting this as some kind of utopian vision of a golden past, but to be honest, the system seemed OK. You paid a water rate, and got water in exchange. If there were supply problems, you’d complain and if nothing was done, you could vote for someone else, so the system could be run properly. Like I say, it wasn’t perfect, but it worked

Today, we have 22 water companies. Ten provide water and sewerage, 12 just supply water (unless it’s not raining. Or it is).

They don’t receive subsidy from the UK government, though 13 of them do share £4.9m per year in EU Farm subsidy, for some reason.

But interestingly, when we sold them we wrote off £5bn of debts, and handed £1.6bn to them as a ‘going-away’ present. Even then, we couldn’t encourage enough people to buy the system, so we also reduced the cost by 22 per cent of the agreed market value. But hey, this was 1989. Crazy days. We did things different then…

It also goes without saying that the water companies took all the expert employees already working in the system, trained at taxpayers’ expense, and directly employed them. In fact, you can apply that in EVERY case we look at here. It’s not the world’s most important thing, but to be honest, this is what’s meant by ‘hidden cost’, so it’s worth remembering.

It’s becoming depressingly repetitive, but water bills under the new ‘competitive, price reducing’ regime had, er, increased by 44 per cent by 2012. Again, this is 44 per cent ON TOP OF the rate of inflation. They’ve gone up another 5.6 per cent this year. But that’s just consistency, which is so important.

And ‘subsidy’ is an interesting term. One of the few promises the Lib Dems have managed to deliver on in their ill-advised holiday in power is to get rebates for the customers of the highest-charging water company in the country.

South West Water charges its customers £517 per year for water and sewage services. In London, by contrast, the figure is £394. So the coalition has stepped up to the plate. Those customers, next year, will receive £50 each as compensation.

Only thing is, South West Water isn’t paying this money to the customers it has fleeced. The government is. The government is effectively fining South West Water for overcharging its customers, but then paying the fine on its behalf. SWW keeps the money it has unfairly stolen from its customers and the government pays for the wrongdoings of a private company. But hey, it’s 2012. Crazy days. We do things different now…

Which brings me back to Richard Flint. Now, on the same BBC News South East broadcast little Richard was talking on, a helpful chap from South West Water popped up, to explain to us ill-informed water users that the reason water supply is so difficult is because while it has rained a lot in some places, it has, simultaneously rained a bit less in other places.

So here’s the thing: Richard, you’re right. There are too many water companies. There are 21 too many. What we need to do is take all the water companies, which have proven expensive and inefficient, and roll them into one company, which can also deal effectively with problems such as slightly different levels of rainfall in different areas of the UK, by, for example, getting all the water in the country and distributing it so that everyone has enough water at all times.

This company could also set policies on issues such as the level of water we use, to help with the massive environmental problems associated with consumption of natural resources.

Now I know what you’re going to say: ‘But, but, but, who could possibly operate such a company?’ Richard, my dear fellow, I’m glad you asked. The government. It already exists, and already runs the whole country, as well as existing solely to serve its people, so it’s pretty well-placed to take this job on.

It’s also fully elected, so we can get rid of it if it’s useless, and replace it with a better one, and its accounts, unlike yours, would have to be completely transparent, so we could actually see what the money we spend is being used for. I’m so glad to have helped you out. Please close the door on your way out…

(I have to give some credit here where it’s due. On the same broadcast, Green MP for Brighton Pavilion Caroline Lucas said she recommended one water company for the whole country. I’m afraid you’ll just have to take my word that I had already thought of it before I heard her say it).

Shareholders

We’ve still got trains and electricity to come – if anything even worse performers than gas, buses and water companies – so it’s worth a quick note on shareholders here.

See the problem is, every year every one of these private companies pays millions of pounds to its shareholders. And it’s dead money. Once you pay your bill, that portion of it which is handed to them is lost to whatever service you’re paying for.

Now it would be unfair to blame these companies for this. Because a curious quirk of UK company law is that a company’s first priority, legally, must be to its shareholders, ensuring they receive a payout on their investment.

This is fine if you run a chain of restaurants, or sell bits of nylon with a badge tacked on laughingly referred to as ‘sportswear’. But it’s no good if you provide a service, for two reasons.

First, because these are services. People can’t do without water, gas or electricity. And very few can do without transport. As a service provider, your priority when supplying something without which people will die must be to the people you serve, not to someone who happened to bung you a bit of cash 15-20 years ago. You have to make sure your service runs efficiently and is available at an affordable rate for all, as your sole priority.

Second, we just can’t afford to pay through the nose for a service, then pay subsidies to the companies which provide it, and then watch a significant proportion of those payments leach out of the service we are paying for. That money must be used to improve services, both for reasons of improving technology and because in many cases, there are serious environmental factors to be considered.

Like I say, this is not an accusation that these firms are evil. They have done a poor job, certainly not what they were brought in for, but asking them to restructure their priorities is tantamount to asking them to break the law.

We can’t, in all conscience, ask that. So take the companies back, run them as nationalised entities and as if by magic, the ‘dead money’ problem is gone.

The money can be used to improve, and change where change is needed.

Rail

Rail privatisation took place in 1994. The Labour Party said it would reverse it, but when it won the 1997 General Election, changed its mind and kept it in place instead.

On all counts, we can only conclude that rail privatisation has failed.

First, there has been a massive reduction in services, as ‘non-profitable’ lines have simply been dropped.

Ticket prices have shot up well above the rate of inflation, so that it now costs, as standard off-peak rate, £93.50 to travel return from Brighton to Liverpool. If there’s two of you, it’s cheaper by car. If there’s four, it might well be cheaper by taxi, and despite ‘targets’ which must be met for the rail companies to renew their franchises, 40 per cent of all long-distance services, 30 per cent of all services in operation across the UK, which ran in 2011-12 arrived late at their destination.

This is despite companies’ illegal practice of cancelling services mid-journey to meet their ‘punctuality’ targets.

There is an interesting point to be made about safety. It is widely held that post-privatisation, train travel has become less safe. Statistically, this is in fact not the case. There were, for example, more fatal crashes (12) in the eight years before privatisation than in the eight years after it (nine).

But what is interesting is to look at the causes of these crashes. In 11 of the 12 fatal accidents to have taken place in the eight years up to 1994, the cause was driver misjudgement of one kind or another.  In four out of the nine to have taken place since, the causes were maintenance issues. Of course, this makes little difference if you are one of the people affected by such a crash, but it’s hard to escape the conclusion that these were accidents which could have been avoided if rail – and train – maintenance had been carried out properly.

The most famous example of this was the Hatfield rail crash of October 2000, when a section of rail disintegrated under a travelling passenger train. Not only could Railtrack, which at the time ‘owned’ the railways (the transit companies own stations and trains) not explain how such a damaged piece of track could have gone unnoticed, or been left unrepaired, it was also unable to say how many other sections of railway this might be true for. It was hard not to conclude that a drive to make profit had seen the company neglect its sole duty – ensuring the track and its signals and points were safe enough to carry trains.

It is not as if this was because Railtrack had received no assistance. It had been handed government subsidies of £10bn between 1995 and 2001. It paid 41 per cent of its profits to its shareholders in the same period. Labour acted, replacing Railtrack with Network Rail, a ‘non-dividend’ firm, in 2002.

Subsidies for rail companies are the most often voiced problem with the privatised rail service (and with justification, as we shall see) and have, in combination with the coalition, caused the most recent anger over fares. But before we come to them, it’s worth a quick note on the reasons why rail privatisation didn’t deliver – and couldn’t have delivered – any of the benefits the government promised.

Train users are an almost uniquely captive audience. It is possible for two water companies to compete directly with one another, delivering water to your house at a reduced rate. If bus companies wish to compete, they can run buses on the same routes as other companies (though built into this is that when one firm ‘wins’ it stands alone, with freedom to dictate fares and service provision as it wishes, as has in fact happened).

But the train franchises were split geographically, meaning one company controls all services on a particular route. The problem here is obvious immediately. If one firm controls all journeys between Reading and Manchester, for example, and that’s the journey I need to make, I can’t very well say ‘oh, well, the Glasgow to Aberdeen service is cheaper, I’ll go for that.’

As we have seen, competition between service providers does not and has not delivered the reduced prices and improved services it was promised to in any area, but that competition never even had a chance to exist in the rail privatisation.

As a result, rail in the UK is today not only Europe’s least reliable, it is also its most expensive. On average, the cost of a day return ticket in the UK costs 26p per kilometre, compared to 17p in Germany, the next most expensive country, and eight pence per km in France, the cheapest. For long-distance journeys, in the UK, the cost is 49p per km, while the next most expensive, Switzerland, works out at 39p per km. France, again cheapest, costs 15p per km.

And so, once again, to subsidies. First of all, it’s vital to reiterate that in a truly privatised system there would be no subsidies paid to private companies. I can only assume the reason we do so in these cases is that successive governments have realised that these are public services, not free enterprise, and have a vital part to play in the life of the nation. Which then raises the question of why they were ever privatised to begin with, but on such questions, sadly, the fate of nations is decided.

In 1989-90, the British government spent roughly £1bn on British Rail. In 1994-95, the first year after privatisation, it spent £2.2bn subsidising private rail operators. In the years since, the lowest subsidy has been £1.2bn, paid by the Labour government in 2000-01, and the highest, £6.3bn, paid by Labour in 2006-07.

The coalition paid £5bn in 2010-11 but decided in the face of public pressure and financial imperative to reduce this for 2011-12 to £3.96bn. They had every justification to do so. But once again, they chose a remarkable means by which to make the saving.

The government decided to cut the subsidy by allowing train companies to make above inflation rate increases in ticket prices. These were at one per cent higher than the 5.6 per cent rate this year, and will be three per cent above inflation for the next two years (though inflation is predicted to fall in these years).

On the one hand, this is an awful piece of policy-making, as it makes rail travel (and bus travel, as explained above) less attractive to potential users. People won’t travel by train if they have to pay more than they can afford to do so. In all honesty, in terms of the effects on the train companies, it’s not really an issue – they must stand or fall for themselves.

But in terms of the effects of removing mass public transport from the reach of people in the UK, there are three main concerns. One, people must travel. It is their right, but it is also vital for an economic system to operate. Two, the environmental effects of forcing more people into cars is potentially disastrous, and three, in purely pragmatic terms, it means we will be further than ever from meeting the air quality targets we must achieve, and therefore will continually be fined. Are we to count these fines as further subsidies for our privatised transport system?

But there is an upside. Because inadvertently, the coalition policy shows us something. It proves we can run a transport system, or a water system, or an electricity supply service, with little effort or financial cost. Because if the companies rely on subsidy, we are already paying it. And if more of their money comes from public use (in 2010, rail companies earned £7bn from ticket sales) the public will still use them, helping fund the very systems they use.

Indeed, if we drop prices a little (which can be done because we will not be paying hundreds of millions of pounds per year to shareholders), train use, and therefore customer revenue will increase.

Finally, of course, it means that money can be used by the government to carry out planned service provision to the UK public.

And the need for such policy has seldom been as vital as it is now, in electricity supply.

Electricity

No-one could truly argue that electricity is not vital to human existence. But its production is a matter of crisis, in the UK and across the world. Yet, at present, its supply here is controlled by companies which have shown little to no inclination, let alone inspiration, to help us overcome a looming disaster.

Electricity services were privatised in the UK in 1990. In common with all other privatisations, and in direct contravention of the promises made when the process was undertaken, bills for electricity have increased alarmingly – by 40 per cent to 2011-12, and a further 20 per cent increase will come into effect next year.

There are now 4.7m households in ‘fuel poverty’ (spending ten or more per cent of their income to heat their homes to an acceptable level, rated at 18-21 degrees), more than double the number in 2003.

The reasons for this are varied, but paucity of supply of resources (which IS a factor) is not the sole reason, as EdF, a French firm, and the UK’s largest single producer of electricity, actually provides the cheapest electricity in Europe. Sadly, it does so in France. Here in the UK, its prices are amongst Europe’s highest.

Ironically, EdF is a nationalised company, owned by the French government. But here in the UK, it operates as a private firm, paying its ‘shareholders’ (in this case the French government) a premium, taken from the subsidies it receives as well as the money it charges for electricity supply. This is not EdF’s fault. It is a logical result of a system in which we have sold off our means of electricity supply. In all honesty, I can see no reason why the French government should not benefit from our electricity bill payments, if we do not. And we do not.

In any case, the pressures on electricity production are at least three-fold. First, the UK is now a net fuel importer. We simply do not have enough coal, oil and gas within our own borders to produce the power we need. You may also have noted there are very few piles of uranium lying around, so any nuclear energy we produce happens on the basis of importing fuel. In an era of ‘austerity’, this is potentially disastrous.

Second, our consumption levels are, at the present rate of growth, either going to bankrupt the state (which has not yet occurred, despite what the coalition may like us to believe) or alternatively will see the lights, literally, go out. Indeed, the coalition is at present scrambling to prevent a worst-case scenario in which the ‘lights go out’ by 2020.

Thirdly, well, look. I’m not going to get into a tedious debate with anyone who doesn’t believe in man-made climate change. If you’re willing to ignore physical and observational evidence, and contradict the opinions of climatologists the world over, then fair enough. I’ll also assume you’re planning to float home from work tonight, as gravity is probably a ‘myth’ as well.

But climate change is a zero-sum game. Either it’s happening, and we risk the deaths of millions of people through floods, displacement and starvation, not to mention the potential end of humanity as a species by unbalancing the eco-system in which we live, so we take action to stop that happening and save the world, or, we take exactly the same action, it turns out we were wrong, but we have gained an inexhaustible supply of electricity.

Because non-renewable resources are exactly that: non-renewable. And they’re running out. So, if we don’t find an alternative, fast, we’re without electricity whether we’re up to our waists in seawater or not. If you don’t believe in climate change it’s your call. But one way or another, we need renewable energy, as there’s very little else left.

The problem is, our electricity system is far too chaotically run at present to make any serious headway or progress in any direction whatsoever.

To begin with, subsidies for electricity companies in the UK are, to be honest, a shocking mess. There are almost as many arguments about what constitutes a subsidy as there are actual subsidies paid.

In brief, the rates it seems fairest to set the figures as follows: production of electricity from fossil fuels receives roughly £3.63bn per year from the government (in ‘preferences’ as well as direct payments. We’ll come to this…). Renewables receive roughly £1bn-£1.6bn, depending on your source, while nuclear power, depending on your view, receives anywhere from £4bn to £104bn, though none of this comes from direct subsidy payments, as EU regulations mean it is illegal to pay cash directly to nuclear energy producers.

It’s worth remembering here that while the fossil fuel components of the energy industry were sold off at close to their actual market value, and the renewable industry was basically non-existent, the nuclear industry was revealed, in 1990, to be a shambles.

It took until 1996 to find a company even willing to take on nuclear power in the UK, because it was making huge losses year-on-year. In the end, we actually disposed of it for nothing. We handed it, wholesale, to British Energy for no money at all, despite the billions of pounds of public money which had been spent on manufacture of nuclear power stations, and on the training of people who were supposed to ‘make nuclear power work’. We lost every penny we had invested in the entire industry.

Within the industry, as has happened during almost all mass sell-offs, groups of experts split into small companies, selling their services to British Energy. They are not to be blamed. Their services were needed, and they got the best price for them. It’s debatable how beneficial this was to the nation as a whole, however.

It doesn’t end with us handing over an entire industry for nothing, though. Because in 2003, after just seven years in charge, British Energy had to be bailed out with £4bn. I genuinely hope there has never, anywhere in the world, been a worse privatisation.

Internationally, issues such as safety and waste have been improved, and it’s to be hoped any move towards nuclear fuel in the future will be more successful than our previous attempts.

But in terms of carbon, nuclear power generates seven times the amount of CO2 created by wind energy, while the waste from the nuclear process is poisonous to almost all forms of life on the planet, and still must be ‘stored’ as it remains impossible to dispose of it safely.

In any case, the two major ‘subsidies’(perhaps more accurately, ‘financial advantages’) the nuclear industry now receives work as follows: First, the industry has a ‘cap’ set on the amount of repayments it has to make in the event of an explosion or other disaster – effectively a ‘maximum’ insurance pay-out, of just £140m (soon to be increased to £948m) – meaning it pays less for ‘insurance’ than other energy producers.

Bear in mind that the estimated cost of the clean-up after the Fukushima Daiishi nuclear reactor was struck by earthquake in March 2011 is just over £162bn and the Three Mile Island disaster in 1979 cost around £648m, and it’s pretty clear the industry is getting a cash ‘break’ from the UK government. As a side point, BP has so far paid out around £30bn in claims alone, following the Deepwater Horizon disaster in the Gulf of Mexico.

The second ‘indirect subsidy’ comes in the form of what happens to nuclear power stations when they finish their useful lives. In most industries, the ‘decommissioning’ of buildings and material when such things are no longer useful, is the responsibility of the business owner. Cash must be set aside for such an eventuality.

But not in the case of the nuclear industry. The government, and by extension, we, as taxpayers, have pledged to pay for all decommissioning of nuclear power stations. And the cost? £100bn.

So nuclear power has a ‘gift’ of £100bn from the taxpayer, even though the system is run and operated by private companies, which use parts of their income to pay shareholders. Even if we forget the billions of pounds which were pumped in to nuclear energy in the early days, and that we gave the business away, then paid an extra £4bn to keep it afloat, this £100bn ‘gift’ is a financial support which, at current rates, it will take 70 years for our subsidy of the renewable fuel industry to match.

Added to that, the government’s ‘carbon floor’ charge appears to have been set specifically to benefit nuclear energy. As policies go, it is, on the face of it, a good piece of environmental thinking – effectively, any energy production which causes large CO2 emissions will be penalised through a charge.

Certainly, this is aimed at fossil fuel production, and is designed to ‘inspire’ lower emissions. But the floor happens to have been set at a level where the nuclear industry will not have to make such payments – even though nuclear energy production causes emissions at least seven times higher than production using renewable sources.

It is puzzling, if it is not specifically designed to favour nuclear energy production, why the floor has been set at a level at which treats renewable energy exactly the same as a method which is seven times worse for the environment.

Subsidies for fossil fuels are also the topic of furious debate. The industry receives £3.63bn per year, in large part because VAT charged on such fuel production is five per cent, rather than the 20 per cent rate paid by almost all other businesses for goods and services in the UK.

Of course, in part it is possible that this is designed to be of benefit to customers – an attempt to reduce fuel poverty, for example. Meanwhile, Tim Worstall, of the Adam Smith Institute, repeatedly uses his role as sometime columnist in both the Daily Telegraph and the Forbes website to argue that this is not a ‘subsidy’ at all, just a matter of taxation. It is a staunch defence of fossil fuel-based energy production.

But it falls on two very important points: first, this quarter-rate of VAT payments means it costs LESS to produce electricity from fossil fuels than through other means – and Mr Worstall himself argues that any VAT increase would be passed directly to customers rather than covered by the profits of the companies which produce electricity this way, meaning companies are already charging with profit, rather than service, in mind.

And second, to put it another way: your electricity bills have increased 40 per cent since privatisation, and will increase a further 20 per cent in the next 12 months. Electricity companies benefit from a tax break no other industry does. Is the VAT rate an agreement to keep costs down for the consumer, or is it perhaps a concession to allow profit-building and increased pay-outs to shareholders?

For renewable energy, the figure is £1bn-£1.6bn per year. This is no small amount, and is paid for directly by you, each time you pay your electricity bill. But it is between 25-33 per cent of what fossil fuel production receives, and is around one seventieth of the financial assistance received by the nuclear industry.

Bearing in mind the massive costs already laid out on setting up nuclear power (and energy produced using renewable fuels is still in its infancy – this is when it needs most money, to invest in efficient production), as well as the bail-out of 2003, the amount is tiny.

And yet renewable fuels offer us more advantages than either the production of energy from fossil fuels, or nuclear power. Even if you ignore or deny the possibility of man-made climate change and its consequences (and I believe it is foolish to do so) the economic benefits are clear – at the moment, we pay to import fuel from elsewhere in the world. We have reached peak oil, and gas and coal supplies are dwindling. Even uranium is a limited resource. These things will run out. The clue is in the ‘non-renewable’ bit of the name.

On the other hand, we have (a little) sunshine. And we have a great deal of wind. Water, it seems, is set to be our constant summer companion. These fuels will not run out any time soon. And they cost us nothing.

The economic imperative is clear, and the supply-side of the ‘supply and demand’ of fuels is fast approaching crisis point. Renewable resources are the ONLY sensible medium-to-long-term supply on which we can rely for energy production. Yet even though the lights are in danger of going out within ten years, we are sitting on our hands, as if in the hope ‘something else’ will happen.

And the reason, succinctly, is privatisation.

Early in June this year, the Guardian reported that the coalition’s response to EU-set targets to produce 20 per cent of our energy from renewable resources was to ask – behind the scenes – for those targets to be dropped. Its reason was that market forces meant this would cost too much money for UK companies, and it was unreasonable to ask these companies to spend more money on research and development.

Most of the debate around this topic centred on the irony that a government led by David Cameron, who promised his would be the ‘greenest government’ and Nick Clegg, whose party has traded for 15 or so years on being the ‘greenest’ of the three major parties in UK politics, should be asking for environmental policies to be dropped to make life easier for private businesses.

But we can look at this another way. Because this was a tacit recognition of the fact that since we sold electricity production 22 years ago, we have had effectively no say in how our energy is produced. We handed that over to a set of private companies, designed solely to make profit from the activities they undertake. (We will set aside for a moment the relatively small issue that it is intensely embarrassing for the leaders of the UK government to be reduced to messengers on behalf of big business, begging cap in hand for concessions to be granted to their ‘owners’).

So why don’t electricity companies just get down to it and start producing more energy from renewables? Basically, because they are private companies.

They must make money for their shareholders, or they are breaking the law. This has two major effects: First, they spend millions of pounds each year which could be used for research and development, on shareholder dividends, which is then lost to the industry forever. And second, the nature of making as much money as possible is by necessity short-term. The companies must make profits, year-on-year, for the benefit of their shareholders and to continue to operate in the market. Therefore, the necessity to invest exists only in so far as there is a short-term financial benefit. Anything which loses money in the short-term – even if it has a medium- or long-term benefit – must be given the lowest possible priority.

And as for wider global issues such as climate change? It’s a long time away, goes the argument, and there’s no financial imperative to act today, so, if we’re lucky, they’ll look at it tomorrow.

Being private companies, of course, the deal is that there is nothing the government can do to change the way that they act.

The final irony is that electricity production in the UK IS in a state of constant competition, as was the intention. We have already seen this has failed to produce lower bills for customers, but the experience of privatisation of services in the UK also directly contradicts the other main claim made by supporters of the private sector – that this is where innovation comes from.

In part, this is down to exactly the same financial imperatives – why do today what will cost money, when we can make money exactly the way things are?

But in part it is also because the ‘experts’ and innovators in the field of electricity production are now split between several competing companies. They do not work together to ‘develop’, they work in opposition, meaning the innovations which do arise are often piecemeal and deliver less benefit than if they were worked on by a wider group, and allowed to develop with input from many people, rather than just a few.

In any case, we are now at crisis point. The environment is in peril, and the very production of electricity, on which we all rely, is for other reasons under threat. Privatised electricity producers have proved unwilling and/or incapable of meeting the challenges we face. They should not be blamed for this, but it cannot continue.

Today, as never before, we need a central plan, a target (in this case the development of renewable fuel-based electricity) towards which everyone must work. And it can be done.

If we run electricity production centrally, we can set these targets. We can make them law. We can gather the experts to work as one, rather than in competition. We can remove the shareholders’ dividends from the equation, freeing more money for research and development, we can remove ‘subsidies’ because the companies will be ours, and it will just be our money, being used to develop a way to keep the lights on at minimal environmental (and financial) cost. It need not even cost very much, because the private producers have shown a company can operate – and make large profits – on the money they raise from bills and government subsidy. Without the necessity to make a profit, all that money can be put back into development and service provision. As it should be.

It must be done. And it can be done. So, who’s up for a challenge?

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Who cares?

I very nearly didn’t write this post at all, because I am reading a book on the Spanish Civil War (entitled, imaginatively The Spanish Civil War) by Paul Preston.

It’s so shocking, in its deadpan description of the atrocities of the ‘rehearsal for WWII’ (not a direct quote) that I genuinely began to think ‘compared to this, what’s the point in talking about anything else?’

On the other hand, nothing in the entire course of human history stands alone, and today is a product of every day which preceded it. It’s also worth remembering that things being worse in some other place, or at some other time, is no reason to ignore what’s where you are.

After all, if my leg was on fire, I probably wouldn’t say to myself ‘that guy over there’s head’s ablaze, so rather than complaining I’ll just sit tight and count my blessings…’

So, after that insightful metaphor, I feel I have definitely justified what’s to follow. Any disagreements to the usual address, and I promise I’ll print them out and pin them to my bedroom wall, as usual.

(As a sideline, one thing I learned about the Spanish Civil War was that a popular fascist slogan read ‘Franco – Austerity’. So it’s comforting to know that the Conservatives and Lib Dems are both fully aware of and paying the appropriate respects to the world’s glorious political history…)

Mandate

So a couple of weeks ago, I got into a conversation about the Eurozone (bear with me). I complained that our glorious leader, man of the people ‘Dave’, had told the Greeks to form a government ‘as quickly as possible’.

I can only imagine that before this piece of political gold, the politicians of Greece were chillaxing in togas, eating moussaka and dashing plates to the ground, without a care for the future.

Alternatively, our PM was deliberately commenting on a crisis situation which could affect the entire global economy solely in order to justify his own decision to form a coalition government.

I fear that with just three years until the next General Election, Mr Cameron’s belief that any occasion, no matter how serious, should be used by him to justify his own actions is set to grow, however glaringly stupid the statement he makes to do so.

I am particularly looking forward to hearing him draw a comparison between a cease-fire in Somalia and his own choice to end the ‘years of bitter struggle between my party and that of the deputy Prime Minister, call me Nick’.

Anyway, I got away with this. So I also criticised his statement that the EU must ‘act fast’ to sort out its debt crisis.

In many ways, it’s hard to imagine why no-one had thought of this sooner. I guess it must be because everyone knows about the Germans’ notorious laid-back ‘why do today what can be left to next week?’ approach, and refused, through sheer cowardice, to take the bull by the horns and make the Germans just jolly well sit up and do something for once…

I added that the only thing which let down the new Churchill, undisputed leader of global insight, was that he had refused a package proposed to do exactly that, several weeks earlier.

This, apparently, was a step too far. My Lib Dem-supporting friend asked ‘what mandate did he have to support that deal?’

I magnanimously set aside the argument that it would have been impossible for the Conservatives to have gained a mandate from the people on the Eurozone crisis because they had spent the entire election campaign (not to mention the 25 sundrenched, pleasure-filled months since) telling everyone the UK’s financial position was far worse than everyone else’s (we will DEFINITELY be looking at this another time) and it was all ‘Gordon’s fault’.

Instead, I responded that I wasn’t sure Cameron had received a mandate to do anything at all.

After the police had left, the broken glass had been cleared away and the blood hidden with mats and cushions, I decided I should make sure I hadn’t just invented a definition of ‘mandate’ with which no-one in their right mind could possibly agree.

thefreedictionary.com, who I can only assume will be paying me handsomely for this plug, describes a mandate as: A command or an authorization given by a political electorate to its representative.’, a definition which I’m sure is as exciting to you as it is to me.

The Oxford English Dictionary, meanwhile, probably winking as it touches the rim of its Homburg, prefers the rakish: ‘Political authority given by electors to party in parliament.’

Now. The Conservatives received slightly more than one third of the votes cast in the last election. Which equates to very little more than one fifth of the total number of votes which could have been cast if everyone old enough to vote had done so (the Conservatives are by no means alone in being at fault for the damning indictment of the UK political system that led to two fifths of the electorate not bothering to vote during a global crisis, but they certainly share some of the blame).

It’s true that no political party has won a majority of the popular vote since Baldwin’s coalition of 1935 (the coalition had been formed in 1931, as a result of the Wall Street Crash and Great Depression), but the Conservatives failed to secure a high enough vote share to form a majority government (this has happened once before, in 1974, though Callaghan’s Labour government later that decade relied on a ‘Lib/Lab’ pact. When it fell apart, Labour was removed by losing a vote of no confidence by one vote).

Added to that, the Conservatives stood at the last election as the only major Right-wing party, with the Lib Dems and Labour regarded as Left-of-Centre. The latter parties took a total of 15.4m votes, against the 10.7m the Conservatives won. Despite the coalition, the fact is that after the population of the UK voted overwhelmingly in favour of Left-of-Centre policies, the nation has Right-wing politicians as PM, Chancellor, Foreign Secretary, Home Secretary and in 14 of the remaining 19 cabinet positions.

For the record, the cabinet contains 23 members. Eighteen are Conservatives, with five Lib Dem MPs making up the numbers. The Conservatives won 10.7m votes at the last election, the Lib Dems 6.8m.

Cameron undeniably has permission to govern, given to him by the Queen, but given the above, the idea that the Conservatives have a mandate from the people is stretching things beyond any kind of credibility.

On the other hand, he DOES lead the government. And it’s perfectly reasonable to say he can’t just sit on his hands for five years, waiting for another election.

So what should he do? Well, perhaps he could respond to emergencies, and assist the country to recover from the global recession. Or maybe he could stick, scrupulously, to his pre-election promises, and those made in the coalition agreement. That way, no-one could whinge that he has no mandate, because he would at least be able to point to the fact that his is the largest party in the House of Commons, and he’s doing what his voters requested, with the support of his partners in crime. Sorry, government. His partners in the government.

But Dave is a man of action. A man who likes to keep the nation guessing. A man who thinks what the UK needs in its hour of need is a towering colossus, who will dedicate himself to dismantling the state so his new, ‘improved’ version can start on the worst possible foot –with no cash, the unadulterated loathing of most of the people within it and the blank incomprehension of the rest of the world.

Logically, he chose to start with the NHS.

Health of nations

The NHS has a rather unusual place in the UK’s political system. Introduced in the last period of ‘austerity’ (the one caused by a world war in which more than 50m people died, as opposed to the one we’re in now, caused by the inability of a few expensively-dressed men to behave themselves with other people’s cash, combined with a government which perhaps feels put out it didn’t experience it the first time around. Austerity, by the way, is defined by the Oxford English Dictionary, breathing softly as it runs its finger, lightly, against your cheek, as ‘harsh, severely simple.’ Far be it from me to extend the description to its greatest fans) it has run for 64 years, providing life-saving treatment costing nothing at the point of delivery.

It’s the envy of the rest of the world – a genuinely trailblazing idea (at least in the capitalist world) – and one which has operated with spectacular success throughout its history.

As recently as 2010, an American report (it’s here: http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2010/Jun/1400_Davis_Mirror_Mirror_on_the_wall_2010.pdf go, look at it!) analysed the health-care systems of seven nations; the USA, the UK, Australia, Canada, Germany, the Netherlands and New Zealand.

The NHS was rated first in terms of ‘efficiency’ and second overall. The USA was last. (the Netherlands finished first. No, me neither.). Not only that, the NHS did this on the second lowest ‘spend per capita’, at $2,992. New Zealand spent less, at $2,454. But I’m pretty sure that’s where hobbits live, and they’re smaller than us, so…

Fortunately, though, we have Andrew Lansley as Health Secretary. He is a man who is certainly not just a chap in a suit who holds a position not because of his knowledge of health, but because he happens to be in government. In fact, he is a man who knows more than those who are paid to rate health services. He is more knowledgeable than health workers and specialists around the world. And he has made it his business to let YOU know that the NHS IS inefficient, no matter what so-called ‘experts’ with decades of ‘experience’, ‘learning’  and ‘knowledge’ say.

We are really very lucky to have someone as intelligent and dedicated as him. And we are even more lucky to have Dave and Nick, both of whom have backed him up with their OWN assertion that the NHS is ‘inefficient’.

If you can be bothered, type ‘Lansley, NHS, inefficient’ into Google. I must admit I was going to count the number of different speeches which came up, but I lost count twice. In any case, Lansley, Dave and Nick have been making speeches claiming – or mentioning in other speeches – that the NHS is ‘inefficient’ since early 2009. (in fairness, this is pretty good going on Mr Lansley’s behalf, as the rest of his party didn’t really start making any policy announcements until November that year. And Nick was pretty quiet about the NHS’ inefficiency until about, ooooh, June 2010. I’m really not sure why).

And up and down the country, people agree. Even those who say they support the NHS will come out with the phrase ‘…but it IS very inefficient…’ at some point.

Why?

Well, in part, it’s because of the efforts of Right-leaning newspapers – particularly the Sun, the Daily Mail and the Express.

Weirdly, their own criticisms of the NHS seem to have begun in the 1980s, just after Margaret Thatcher’s introduction of monetarism – a doctrine which claims that the ‘interference of the state in the lives of the people’ is the worst of all possible activities.

Now, to be fair, I CAN see areas in which state interference could be a bad thing. In a bar, for example, chatting to my mates about the football, I’d rather not have Vince Cable popping up to make sure I don’t say something silly about the Brazil side of 1970 as opposed to today’s Spain.

But as lovely as liberty is, I’m not sure I want it to extend to the freedom to die because I can’t afford to have a gaping wound taped up, or pay for a polio jab.

And of course, newspapers LIKE the odd story here and there about a hospital mix-up. It’s their job to hold politicians and service providers to account.

But in every case, there’s a reason why that’s news. Because it’s unusual.

To put it another way, the NHS employs more than 1.7m people. That includes cleaners (numbers cut because of successive – three – governments’ cuts in its budgets), cooks and other support staff, but it also includes thousands of GPs, surgeons, specialists, nurses and therapists.

It treats more than one million people every 36 hours. And in fact, roughly 98 per cent of people born in the UK have experienced at least one successful NHS treatment process and operation. Including you. (I’m assuming you HAVE been born. If not, well… I might stick around where you are for a bit. You know, see how things turn out…)

Compared to that, the maybe ten stories per year that actually turn out to be true AND down to NHS malpractice seem rather a small amount.

But anyway. I know nothing. Lansley’s your man.

Because it appears the NHS IS inefficient, despite all the so-called ‘evidence’ and ‘facts’ which prove the exact opposite.

And he’s driven a solution through Parliament.

There’s a lot that’s been thrown at the Health and Social Care Act, which was passed by the House of Commons by 328 votes to 246 on March 20 2012, and received royal assent from Dave’s fifth cousin, Queen Elizabeth II, seven days later.

One of the major accusations is that it will ‘privatise’ the NHS. I’d like to make it clear that that’s not my view. But it IS very close to the view of Kingsley Manning, director of Tribal Newchurch, a private healthcare ‘provider’, who said he ‘welcomed (the Act’s) denationalisation’ of the NHS.

In fairness to Kingsley, and the opponents of the Act, who include the Labour Party, some Lib Dems (not one of whom voted against it) and all the assorted halfwits you’d expect, like GPs, nurses, surgeons, midwives, you know, people who actually know what the NHS is and how it works, AND the 52 per cent of the public who opposed the Act in an ICM poll in February this year (just 33 per cent said it should become law, which I suppose explains why Dave felt he had national approval), it’s quite easy to see how someone could make that mistake.

See, what the Act actually says is that all hospitals can now raise 49 per cent of their income through private health care, through ‘renting out’ bed and hospital space to private healthcare companies, or, perhaps, by charging for treatments themselves. The cap at present is just below two per cent.

So it’s obviously not privatisation. Just a 25-fold increase in the amount of private health care provided in hospitals up and down the country.

So why would this be a good idea? Well, it’s pretty clear that hospitals can benefit financially from charging more people for healthcare (though this is NOT what the NHS exists to do). And the government fears, with some justification, that the overall cost of healthcare provision will increase massively in the next two decades, as the number of older people, who generally need more regular, and more intensive, health and fitness care, increases.

At its simplest, given that the NHS budget in 2010-11 was £106bn, this could effectively see the service benefit from an extra income of £51.94bn.

But there is, perhaps, a potential problem. See, when Labour introduced the idea that some hospitals could make money by charging for some treatments (with that two per cent cap), it was also involved in a massive building project, in which 157 new hospitals were built, or construction was begun, between 1997 and 2010 (this was, of course, performed under PFI contracts, a disastrously expensive idea. Ironically, one introduced by the previous Conservative government, and OPPOSED by Labour when they were in opposition. But they WERE at least built. The number built in the 18 years of Thatcher and Major was roughly 35). So if there was an impulse for hospitals to fill more beds with private patients (and there was) at least there WERE more beds to be filled.

Under this plan, up to 49 per cent of beds will be filled with private patients. And no new hospitals are planned. So where do the NHS patients get treated?

The debate about whether this is ‘privatisation’, sadly, is one it’s too easy for the government to bat back. It CAN deny it, with some justification, although whatever way you look at it, telling the NHS it can make almost half of its money from charging the population for treatment IS a massive step towards the FULL privatisation of the service. And it is no accident that 49 per cent was the figure chosen. After all, if the financing of ‘demographic change’ is the reason, why not say 60 or 75 per cent of NHS cash-raising can come from private care? One per cent less than half is a thin screen behind which the government can hide.

A far better argument is about WHY levels of privately-charged treatment are a bad thing, and it comes down to a very simple fact: if the NHS is as inefficient as the government wrongly claims, then where will people who can’t pay be treated? Why remove bed space, if your interest is ensuring the public can continue to benefit from free healthcare?

In the end, what is the point of a public healthcare service, which is free to use at the point of delivery (never forget that all of us, you and I included, pay for the NHS out of taxes. It is OURS. We pay for it and we are the ones who are supposed to benefit from it) if the only way to guarantee being treated is if you pay for it?

It is worth here revisiting the ‘mandate’ issue we started with. Because in the run-up to the election, Call Me Dave was pretty clear about his plans for the NHS, or more accurately, about what his government would NOT do.

Speaking to the Royal College of Nursing in 2009, for example, he said: ‘First, let me tell you what we are not going to do. There will be no more of those pointless re-organisations that aim for change, but instead bring chaos.’

As the election campaign, in which ‘Change’ was the Conservatives’ watchword, got underway, he promised: ‘No more top-down reorganisation of the NHS.’

And this promise was repeated in the May 2010 coalition agreement, the document which ensured, after an election in which his party failed to win enough seats to govern, that Cameron could lead a Tory government, the first in 13 years.

The promise reads, simply: ‘We will stop the top-down reorganisation of the NHS.’

Lansley’s bill came just two months later.

A second controversial section of the Act is its proposals for the commissioning of care.

The Conservative Party, and the Lib Dems, at least have some justification here in terms of delivering what they promised. Indeed, when I interviewed Nick Clegg in the 2010 election campaign, he repeated his belief that Primary Care Trusts should be abolished four times, perhaps fearing that otherwise I might focus more on his plan to abolish tuition fees.

Primary Care Trusts are seen by many as a layer of pointless bureaucracy and management in the NHS. Their role included commissioning healthcare in the region they operated, and they had responsibility for spending  roughly 80 per cent of the NHS annual budget.

They were pretty unpopular, among NHS staff, but particularly among the Daily Mail, The Sun and The Express’ ranks of editorial heroes, who claimed this was no more than the pointless introduction of managers to ‘meddle’ in the operations of public healthcare.

I have some sympathy with this view, but it would be remiss of me not to point out that a) the NHS does NEED managers. They are not ALL parasites, attempting to steal from you, the Great British Public, and b) there is a certain disjunct between the view that the NHS is terribly, hopelessly inefficient and that measures to reign in its ‘terrible inefficiency’ (Blair’s Labour Party was always a sucker for making policy based on the outlook of Lord Rothemere, Richard Desmond and good old Rupert Murdoch) were somehow an affront to the very foundations on which the NHS rests.

Either way, there were 152 PCTs, and they were pretty unpopular.

So, Lansley proposed to scrap them.

Astonishingly, he appeared to expect that this would win him unquestioning praise. But there WERE questions. Namely, who on Earth would commission services instead, particularly given his idea that 49 per cent of services should be allowed to be provided by non-NHS providers.

His plan was to replace them with Clinical Commissioning Groups. But surely these would just be the same as PCTs?

Not so, he countered. Because they would be run by GPs (in fact, they won’t JUST be run by GPs, but because of the way Lansley announced the idea, aiming to get as much popular support before revealing the rather murkier elements of the proposal we will return to that in a moment).

Lansley said that scrapping PCTs would save £5bn per year (not counting slightly more than £1bn to be paid out in redundancy deals for those who lose their jobs as a result), and that his plans would instead see GPs, who after all know their patients and so can judge best what treatments are most appropriate for them, commission services.

He said the proposal would: ‘Give patients and health staff more power.’

Savings of £5bn, the scrapping of an unpopular layer of management and more power to GPs and patients? It all sounds too good to be true.

And the problem is, it is.

First of all, GPs don’t want these new powers. The Royal College of General Practitioners joined the Royal College of Nursing, the Royal College of Midwives and the British Medical Association in outright opposition to the Act.

Some medical staff have had a slightly bad press in recent weeks, after their decision to strike over pensions. The Conservatives, hoping they had at last found an issue on which many thinking human beings could agree with them, seized upon this, pointing out that GPs are already very well paid, and why should they withhold services when we are, after all, ‘All in this together’?

But let’s not fool about. These are people who are often well paid, but they also work very very hard indeed, and without them focussing properly on their jobs – to make the rest of us better if we’re sick – we’d be in a much worse place.

And they pointed out, not unreasonably, that if they were to treat patients properly, they wouldn’t have time to chase ‘healthcare providers’ to ‘commission’ their services. It is just about possible, I’d suggest, that when Nye Bevan created the NHS, he considered that IT would provide healthcare services, thus removing the pointless ‘commissioning’ process altogether, but then what do I know?

But this is how £5bn is to be saved: sack the PCT employees and make other people – in this case the people on whom we rely for our health – do their jobs as well as their own.

In effect, then, Lansley was telling GPs ‘you will have the power – whether you want it or not!’

The second problem is that there were 152 PCTs, packed to the rafters with time-serving, money-leeching managers, brutally commissioning services as if it wasn’t tantamount to the biggest fraud ever committed against the UK population.

This number had to be slashed. Because it was wasteful. And probably evil.

Unfortunately, there are now 240 CCGs.

So, there are more commissioning bodies than before, and the GPs who run them fear they won’t have time to treat patients and commission care for them.

Not to worry, though. Because almost as if he’d anticipated this exact eventuality (not that he told anyone. Remember he said he would give ‘patients and health care staff more power’?) Lansley had also made it possible for company directors, including, of course, the directors of the very private health care providers who stood to benefit directly from the increase in the levels of private health care provision within NHS hospitals, to be part of these CCGs.

Even more helpfully, he also made it possible for CCGs to ‘outsource’ the commissioning of healthcare services, and the decisions as to which treatments should be provided by private firms, to, er, the private firms which would earn cash by providing them. Which, I’m sure you will agree, clears that little problem up with no potential ‘conflict of interest’ whatsoever.

Combined with the ‘autonomy clause’, which allows CCGs (or the firms which perform the role instead of them) to decide which services should be provided by the NHS, and which must be paid for, the claim that ‘patients’ are to receive more control looks difficult to justify.

Max Pemberton, a doctor who writes for the Telegraph, used his column in that revolutionary, anti-establishment publication to highlight his concerns about this process.

In an article which began with him saying he is not a supporter of the NHS for ‘ideological’ reasons, but because it does its job well, he said: Services such as mental health provision, facilities for pregnant women, preventive medicine, aftercare and services for children could be substantially reduced by this power to save money, generate revenue or redirect patients into the for-profit sector.’

There are many other concerns raised by, well, more or less everyone outside of Lansley and his closest friends, all of whom know more, but this is a very long piece by now, so we’ll take a brief look at just two of them.

First, the Act changes the law on healthcare provision as applied to the Secretary of State for Health, or ‘Andrew Lansley’ as he is also known.

Previously, the law stated that the Secretary of State, and other Ministers in the Department of Health have a ‘duty’ to ‘provide a national health service’. Under the Act, Mr Lansley’s duty is to ‘promote’ a national health service.

You may argue that there is very little difference between the two. In which case, one may ask why make the change at all? In an Act designed to ‘reduce inefficiency’ (though which has actually caused the number of NHS statutory organisations – those not directly involved in providing care and treatment to patients – from 163 to 521 ‘health and wellbeing committees’, ‘clinical networks’ ‘clinical senates’ etc) of the NHS, why add a change in the status of the Secretary of State for Health?

Provision of a national health service certainly suggests the Health Secretary must provide such a service. That it is his/her responsibility and any failures within it are his/her responsibility. Promotion sounds rather more like a duty to make sure a health service exists and that people are aware of it. If this isn’t a move towards privatisation, it certainly sounds like it.

Connected to this, the Act also removes responsibility for public health campaigns from the NHS.

One justification for this is that, for example, local authorities have responsibility for many things which impact on health, including housing. So, the argument goes, local authorities can set out ‘joined-up’ campaigns to improve public health.

But local authorities only cover small areas of the country. So, depending on where you live, different aspects of health may be focussed upon, rather than the ‘catch-all’ approach practised at present.

Just as importantly, where will the money come from for this? With their budgets slashed by the government, local authorities are already laying off hundreds of thousands of employees and are having to choose between shallow fripperies such as ‘children’s homes’ or ‘care for the elderly’. What would have to be dropped so Manchester City Council could tell Mancunians not to smoke?

Finally, a note on the Lib Dems.

At the party’s Spring Conference, the Bill was discussed. Much to party leaders’ dismay, delegates voted in favour of an emergency motion to ‘kill the bill’.

This meant that not only had the party’s voters never voted for the comprehensive alteration of the NHS, the party membership, at a Conference where policy is set, specifically voted against it.

Many Lib Dem MPs spoke out against the Act in the House, and the party’s response was perhaps the most outrageous in its history.

Senior Lib Dem MPs briefed their party members in the House that the party voting to drop the bill would be ‘a Labour win’. That’s ‘a Labour win’. Not ‘missing an important opportunity to improve the NHS’, or ‘blocking the provision of better healthcare for the population of England’. The party told its MPs to vote against the wishes of their voters, and against the democratically expressed wishes of their own party members, because otherwise it might appear that Labour had won.

A less understanding man than me might ask exactly what Nick Clegg had been talking about in April 2011, when he criticised ‘the old politics of tribalism backed by dinosaurs on all sides of the political spectrum.’

But I might instead simply suggest that the Lib Dems have lost the only thing which made them attractive to voters – the possibility to change the way politics is prosecuted by those within it.

And repeat doctor and journalist Ben Goldacre’s judgement on the briefings.

On March 20, when the final votes were to be cast, and the senior Lib Dems spread their ‘Labour win’ warning, he tweeted: ‘is this a FUCKING PLAYGROUND?’

Of course, some Lib Dem MPs abstained. None, however, voted against the Bill.

The future

As we know, the Health and Social Care Act became law, officially, on March 27 this year. Originally, it was hoped that the policies within it would be in full operation by April 2013, though in recent weeks, Call Me Dave has admitted this is ‘unlikely’.

So what, if anything, can be done?

The BMA’s Annual Representative Meeting voted on June 25 to campaign for the repeal of the Act, while other groups, including campaign group 38degrees, have set up petitions to show public opposition to the Act (38degrees’ petition currently has more than 600,000 signatures, while David Cameron has promised ‘any e-petition which gains more than 100,000 signatures will have its topic debated in Parliament’).

Meanwhile, Labour Shadow Health Secretary Andy Burnham has pledged to repeal the Act ‘at the first opportunity’. It is unlikely his party will be alone in campaigning on the NHS at the next election.

Finally, on April 29 2009, David Cameron told the nation that if elected, he would ensure that politicians were accountable to the public. That if they went back on pre-election promises, or acted irresponsibly, the public would be able to call for a by-election to replace them. He repeated the promise several times, both before and after the election, and the idea was repeated often by Nick Clegg.

Perhaps now is the time to put that pledge to the test?