Daily Telegraph: Brexit done properly could help fix the NHS and fund defence

Big birthdays provide an opportunity for reflection. The 70th anniversary of the NHS fell last week, while this week we celebrate the 100th anniversary of the RAF. Last year saw the 60th anniversary of the Treaty of Rome, which led to the creation of the EU. The attitude of the Government to these three institutions speaks volumes about its understanding of its own purpose.

It is always difficult to comment on the NHS. It is full of dedicated people who work their socks off. And it often delivers excellent results. But this is not the full story. International comparisons of survival rates after the diagnosis of serious conditions show the NHS in a poor light. Moreover, people frequently have to endure long waits for treatment.

The service seems perpetually at the point of crisis and in need of more money. But this is not a problem that money alone can solve. Admittedly, because of ageing, relatively high medical inflation and new treatments, it is inevitable that expenditure on health is going to rise as a share of GDP. Yet this doesn’t mean that we must accept all existing NHS practices or that we should fund all its needs through taxation.

Indeed, if we did this we would end up with a financial and economic disaster as the NHS gobbled up ever more resources. This would require a large increase in taxes that would seriously inhibit economic activity, thereby restricting the funds available for spending, including on health.

Supposedly the NHS is “the envy of the world”. Strange then that other countries do not copy it. This is because its model is broken. It needs to be radically reformed. The key requirement is to strike the right balance between the role of the state and the market. Healthcare can be provided privately and often is. Yet the market, unaided, would struggle to provide adequate results for the population as a whole. For most people, having to fund treatment for some serious medical condition could bring financial ruin.

By socialising the risk of extreme medical events the state acts as a sort of insurance company. But with a key difference. It takes on all people, including the very poor and those with current medical conditions or a past history that would normally exclude them from private insurance cover. So the state can play a crucial role in healthcare. But this does not amount to support for the current Stalinesque system.

Wherever possible, normal economic forces must be brought to bear: greater use of private insurance, people having to pay something for their treatment; penalties for not keeping appointments; and the hiving off into the private sector of particular aspects of healthcare.

How the UK’s healthcare compare with other leading nations Governments do not dare embark on such an agenda. Supposedly, there are many votes to be had by promising more money for the NHS but none to be had by promising to reform it. Interestingly, as this Government has thrown more money at the NHS, which, even without social care, currently takes up over 7pc of the UK’s GDP, it has squeezed defence spending, which is only 2pc, even after dubious accounting wheezes. The recently promised £20bn per annum increase in NHS spending amounts to roughly a half of our total defence spending.

Yet defence is par excellence the responsibility of the state. Unlike medical care, defence cannot be undertaken by the private sector at all. It is a pure public good. Supposedly, there are no votes in defence – although I don’t believe this. Anyway, we ought to have learnt from history that if we fail to defend ourselves, then there will simply be no votes.

And so to the EU. The Government has proposed a deal that would be a travesty of everything that Brexiteers campaigned for. Brexit is not a magic wand. Doing it badly is not a recipe for economic success. We are in danger of getting the worst of all worlds in which we are shackled to a failing economic area without the ability to influence its decisions or to exercise the freedom over trade policy and regulation that constitute the essence of the economic case for Brexit.

A botched Brexit combined with surrender to those calling for much higher taxes would consign the UK to the economic slow lane. Yet if Brexit were done properly and the Government deregulated the economy and cut taxes then the overall pie could be bigger and this would facilitate more spending on both defence and the NHS. Many supporters of the EU cannot comprehend this. They are suffering from a delusion. Despite the EU’s economic performance over recent decades being relatively poor, they think that it is an economic success story.

Indeed, they may think that it is “the envy of the world”. But in that case, why aren’t countries around the world clamouring to ape its various practices? They want to sell into the EU and indeed do so with enormous success, apparently overcoming those fearful “barriers” about which we have recently heard so much and managing to cope without the fabled “access” that we enjoy. If and when we leave the EU fully, we would be in the same position.

Far from envying the EU, other countries look to it as a lesson in what they should avoid. Strikingly, no groups of countries are seeking to form a customs union or single market along the lines of the EU. Yet Theresa May seems to believe that it is vital for the UK somehow to continue to belong to “our” customs union and single market. Funny that.

This Government has pulled off an astonishing feat: throwing enormous amounts of money at an unreformed NHS, lamely accepting the case for higher taxes, grossly underfunding the defence of the realm, and tamely proposing a Brexit deal that would make the UK a vassal state of the EU. If this is Conservatism then may heaven protect us from the alternative.

To read Roger Bootle’s piece for the Daily Telegraph in full, click here.

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