The healthcare crisis is a political choice, not an economic necessity

Prem Sikka is an Emeritus Professor of Accounting at the University of Essex and the University of Sheffield, a Labour member of the House of Lords, and Contributing Editor at Left Foot Forward.

By any measure, the UK healthcare system is in deep crisis. It is mainly due to policies of the government which have normalised austerity, real wage cuts, poverty, regressive taxation and under-investment in public services. People are paying for this with their lives.

Evidence of the crisis is all too visible. At the end of February 2024, some 6.24m individuals were waiting for 7.54m National Health Service (NHS) hospital appointments in England alone. This compares to 2.5m appointments in 2010 when the Conservative government came to office. It increased to around 4.6m in February 2020 just before the pandemic, and hit 6.2m in February 2022 and has increased since then.

The consequences are deadly. Some 300,000 people a year are dying whilst waiting for a hospital appointment. Millions have a long wait for ambulance and treatment in accident and emergency departments. In 2023, 14,000 people died in Accident & Emergency departments at hospitals. The deceased are typically the less well-off and suffering from delays and cancellations of hospital appointments.

The NHS has been weakened by years of underinvestment. It has fewer doctors and nurses per person than most of its peer countries. Due to lack of beds, staff and equipment, Britons die sooner from cancer and heart disease than people in many other rich countries. In 2022, over 39,000 people in England died prematurely of cardiovascular conditions including heart attacks, coronary heart disease and stroke.

It is not only hospitals; people are finding it hard to see a family doctor, often known as general practitioners (GPs). In 2015, the government promised to increase the number of GPs by 5,000 by 2020, but February 2024 there were the equivalent of 1,862 fewer fully qualified full-time GPs than there were in September 2015. Despite the pandemic and an ageing population, government funding for GPs in 2022-23 was 3.3% lower than in 2018-19. One in 20 patients have to wait at least four weeks to see a GP, a necessary precursor for most hospital appointments.

The UK has 49 dentists per 100,000 people, the lowest rate among G7 countries Last year, 23,577 dentists performed NHS work, down 695 on the previous year, and over 1,100 down on pre-pandemic numbers. Low rates of pay are cited as a major reason for dentists’ refusal to accept NHS patients. People are reduced to using pliers to pull their own teeth out and use glue to manage dental problems. Lack of oral health can increase the risk of gum, mouth and heart disease.

Neoliberal Economics

Agony for many is the direct result of government enforced austerity, anti-trade union and worker laws, real cuts in wages and unchecked profiteering. In 1976, workers’ share of the gross domestic product (GDP) in the form wages and salaries was 65.1%. It is now barely 50%. Despite real economic growth, the average real wage is unchanged since 2007. In March 2024, the pre-tax annual median wage was £28,104. The Joseph Rowntree Foundation estimated that a single person needs £29,500 a year to reach a minimum acceptable standard of living, and a couple with two children need to earn £50,000 between them. Low wages mean that more than 50% of the population has income which is below the level needed for minimum standard of living.

Nearly 6.2m workers are in insecure jobs, defined as low pay, temporary or part-time roles with contractual insecurity and very limited access to workers’ rights. Around 17.8m adults have annual income of less than £12,570. Some are able to top-up their incomes with social security benefits, which have failed to keep pace with inflation. From 2013-2019, government reduced social security benefits in real terms by freezing their value or increasing them by a lower rate than inflation. Work doesn’t pay enough and 38% of the claimants of universal credit are in work.

UK state pension is the main or the only source of income for majority of retirees. It is around 50% of the minimum wage and 2.1m retirees live in poverty. Out of a population of about 68 million, despite welfare payments, 12m people live in absolute poverty i.e. income below 60% of median income. Some 4.2m children, a quarter of all children, live in poverty. More than 400,000 children and young people a month are being treated for mental health problems.

Child poverty levels in the UK are worst among world’s richest nations. A UNICEF report ranked the UK 39th out of 39 countries. The government’s two-child benefit cap has deprived 422,000 families, often the poorest, of £3,200 a year.

People’s disposable income is depleted by a regressive tax system which penalises the poorest. In 2021-22, the richest fifth households paid 31% of gross household income in direct taxes; compared to 14% by the poorest fifth. The richest fifth paid 9% of its disposable income in indirect taxes, compared to 28% by the poorest fifth.

Low wages, never-ending austerity, loss of public services, regressive taxation and unchecked profiteering has deprived them of good food, housing, medicines, education and goods and services essential for a healthy lifestyle. In 2022/23, more than 800,000 patients were admitted to hospital with malnutrition and nutritional deficiencies, a threefold increase in 10 years. Scurvy and rickets, once banished, have returned. People living in damp, mouldy, poor and crowded accommodation are more likely to suffer from asthma, wheezing, respiratory illness, tuberculosis and meningitis. 1 in 6 people aged 16+ had experienced symptoms of a common mental health problem, such as depression or anxiety.

Due to poverty and lack of healthcare, 2.7m people are chronically ill. More than 500,000 under-35s are out of work due to long-term illness. A study reported that between 2012 and 2019, government imposed austerity caused 335,000 excess deaths in England and Scotland i.e. nearly 48,000 a year. According Marie Curie Charity, around 93,000 people are dying in poverty, which includes 68,000 senior citizens and 25,000 working age adults. Another study estimated that between 2011 and 2020, 1.2m people in England died prematurely from a combination of poverty, austerity and Covid.

The necessary healthcare support has been systematically eroded. In 2016, Exercise Cygnus concluded that the NHS would not be able to cope with a flu pandemic. The government responded by cutting the number of hospital beds. In 1997/98, England had 299,000 NHS hospital beds compared to 141,000 in 2019/20, down to 103,277 general and acute beds in January 2024. The decline may be partly explained by better medicine, technology and, care of the mentally ill in community, but the same factors affect other rich countries too.

The UK has 2.4 hospital beds per 1,000 population; compared to 12.6 in Japan, 7.8 in Germany, 6.3 in Poland, 5.7 in France, 4.4 in Switzerland, 3.4 in Norway, 3.1 in Italy, 3.0 in the Netherlands and Spain, and 2.9 in Ireland. The number of beds in unevenly spread and the poorest areas have the fewest. For example, Homerton University Hospital NHS Foundation Trust has just 0.9 beds per 1,000 people, less than the average for Mexico. Bedfordshire Hospitals NHS Foundation Trust has just 1.7 hospital beds per 1,000 people, about the same level as in Colombia.

Ending the Crisis

Pandemics and ageing population add to healthcare pressures but the UK crisis is manufactured by the government’s intoxication with neoliberal economic theories advocating real cuts in wages and public services. These policies need to be reversed with emphasis on equitable distribution of income and wealth, better housing and funding of public services.

Such recommendations rile neoliberals who immediately raise the old bogey of “we can’t afford it”. It is as though they accept death and misery as the price for adherence to defunct economic theories and glory of the social gods of arbitrary self-imposed fiscal rules. They never asked about affordability when the state provided £1,162bn of support (£133bn cash and £1,029bn of guarantees) to bailout ailing banks and £895bn of quantitative easing to support capital markets. Since February 2022, some £12bn of support, including £7.1bn military aid has been provided to Ukraine. Some £37bn was found for the war in Afghanistan. In the last decade over £75bn subsidy has been handed to privatised rail companies.

People deserve better. Without eradicating poverty and creating a good healthcare system and social infrastructure, the UK economy cannot be revived. Capital’s share of GDP will need to be reduced so that workers can have better quality of life. Even if governments are unwilling to embrace the Modern Monetary Theory or additional borrowing, millions can be raised for better and effective healthcare by eliminating tax anomalies and perks enjoyed by wealthy elites. For example, by taxing capital gains at the same marginal rates as wages, around £12bn a year in additional revenues can be raised. The same remedy for dividends can raise another £4bn-£5bn. Levying national insurance on recipients on capital gains and dividends, currently exempt, can raise another £8bn-£10bn. Indeed, a few a few reforms without increasing the basic rate of income tax and national insurance or the headline corporation tax rate can yield over £90bn a year in extra tax revenues.

The healthcare crisis is a political choice not an economic necessity. Governments which can fund wars, bailout banks and subsidise corporations can also save lives and improve the quality of life of their citizens.

Image credit: Sheila – Creative Commons

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