Saturday, 31 October 2015

Unsafe hospitals and low pay in the NHS

A couple of weeks ago, I heard on the radio that a report by the Care Quality Commission (CQC) has been published which described three quarters of NHS hospitals as unsafe. I work for an NHS Community Trust which was inspected recently by the CQC - we got good marks on everything except patient safety in our bed-based units (community hospitals) for which it was found that improvements were necessary. The reason we fell short on patient safety was the fact that we did not have sufficient numbers of nurses on all shifts. The Trust respnded to this verdict with an intensive recruitment drive, even sending representatives abroad to look for new nursing staff (including, incidentally, to Romania where, some would have us believe, the entire population is desperate to come to the UK) but even after this it was unable to recruit enough qualified staff to maintain the required levels for patient safety. Consequently, the decision was made to close one of the community hospitals, with existing staff having to be relocated to different sites (some simply resigned, exacerbating the problem of low staffing levels) and patients also had to be moved further away from their home area, making family visits more difficult. As a result of the closure of this community hospital there are now less community beds available than previously in the county in which I live and work.
The government claims to hav 'ring-fenced' NHS spending, but by freezing pay for NHS staff year on year* during a time of rising costs of living, a situation has been created in which there are now serious difficulties in the recruitment and retention of staff.
From my own experience working in the NHS I know that another consequence of the difficulty in maintaining staffing levels is that clinical staff often end up having to cancel previously scheduled training in order to stay and help out on wards, particularly when one or more colleagues may be off sick (and of course, sickness levels inevitably increase when staff are under additional stress due to having to work in an inadequately staffed environment); and staff being behind on training is another factor which contributed to hospitals being considered unsafe in the recent CQC report.
Those 'conspiracy theorists' who see a pattern developing in which the government appears to be deliberately making life difficult for the health service, and allowing its reputation with the public to be damaged, in order to make the process of privatisation (which is already underway in one sense**) easier, would certainly not be dissuaded of their view by this situation of wards and hospitals having to close as a result of Trusts' inability to recruit and retain staff, nor by the recent press coverage regarding the high proportion of 'unsafe' hospitals.

*The only reason that nurses and other NHS staff managed to get a 1% pay rise last year was by resorting to strike action - something that is very unlikely to be possible in the future if the government brings in their proposed new anti-trade union legislation.

**40% of new NHS contracts currently go to private healthcare companies.

Friday, 23 October 2015

Why progressive taxation is better than 'People's Quantitative Easing'

Jeremy Corbyn and John McDonnell and their economic guru Richard Murphy have spoken frequently of their plan to use quantitative easing (increasing the supply of money in the economy) to help fund projects such as housing construction, green energy production, digital infrastructure etc, as a way of creating jobs, getting the economy moving and solving some of the social and environmental problems that we currently face.
While I agree that these are laudible aims, I am not sure that quantitative easing (QE) is the best way for a future Labour government to go about raising revenue.  My reason for this is as follows:
Any increase in the supply of money inevitably decreases the value of money that people already hold, and this affects everyone in equal proportion, eg. a 2% increase in the supply of money means that, all things being equal, the value of all previously existing money decreases by exactly 2%.  In other words, QE operates as if it were a flat tax on everyone, including the low paid and those on benefits.  And since those with low incomes spend a higher proportion of their earnings on essential goods, they are more detrimentally affected by a decrease in the value of their money than those who have more of the stuff. QE, therefore, like VAT, is effectively a form of regressive taxation.
There is an argument, which may well be correct, that as long as there is excess capacity in the economy then increasing the money supply to fund investment should not cause inflation - the increase in available goods and services should counteract it (because the more products that are vying to be bought by those that have money, the greater the demand for money, thus increasing the value of money relative to those products).  However, even if this is the case, it means that, to the extent that the increase in goods and services were to be funded by some other method  - one which did not impact on the low paid - those at the lower end of the economic scale would benefit from an increase in purchasing power, which QE denies them.
For these reasons, I think that a better way to fund necessary and beneficial infrastructure projects would be to use some form of progressive taxation - rather than QE which, as explained above, is effectively a flat tax - so that the real cost of investment is distributed in a way that does not impact disproportionately on the low paid.

Thursday, 15 October 2015

The Fiscal Charter: Damned if you support, damned if you oppose

I think John McDonnell and the Labour leadership were right to oppose George Osborne's Fiscal Charter yesterday. It is not the job of the current government to try to impose it's will on future governments. It is for future electorates to decide what kind of government they wish to install in 2020 and beyond, and to decide what type of economic policies to oppose or support.
The Fiscal Charter is clearly nothing more than a publicity stunt designed to either undermine Labour's credibility as an anti-austerity party (had they supported it) or to make them appear economically irresponsible in the eyes of the general public in the event that - as was the case - they opposed it.
Perhaps the best approach would have been a mass abstention on the part of the parliamentary Labour party. This would have avoided disunity in the party ranks while treating the Fiscal Charter with the contempt it deserves.