Could Donald Trump really force us to allow US healthcare companies to take over the NHS? Or is it bullshit?

At school everyone knew someone who told lies. Massive lies. If your dad had a new car their dad had a helicopter. If your dad had new job their dad was James Bond

If you went to Tenerife, they had been to Elevenerife.

If you went to Belmont you didn’t last long with that kind of fibbery, and most people soon grew out of it. Or have it beaten out of them.

But sometimes people grow up in a privileged world where they never have to accept the hard consequences of persistent bullshitting. Boris Johnson. Donald Trump. Trump has elevated this kind of bullshitting into an art form. Possibly the first authentic new art form of the C21st. Trumpshit.

Now that the dust has settled on Trump’s visit to the UK I thought it might be fun to go back and look at his claims that the NHS would be on the table in any future trade deals. Pretty much everyone I know got really angry about this, and plucky memes set sail across the internet powered by the retweets of politicians eager to pose as champions of state healthcare.

Trump increasingly looks like a rather sad figure, flying around the world on State visits to avoid facing up to his failure to achieve very much at home. He’s been on state visits to the UK and Japan back to back.

It’s not unusual for US Presidents to visit the UK, although these visits are mostly working visits to attend meetings of the G7, the G20 or NATO. State visits are rarer and most US Presidents only have 1 in the course of an 8 year term of Office. Some will remember George W Bush going to the pub in Sedgefield with Tony Blair. How Dubya didn’t spot we were taking the piss out of him I’ll never know. There were no state visits at all in the 1960s and 70s. Even Jimmy Carter’s trip to Durham for the Bi-Centenary was tagged onto a working visit.

Trump has been here twice in the last 12 months which looks rather like someone with time on their hands.

While we were members of the EU we were bound by EU procurement rules. EU procurement rules are a massive pain, and have lots of bureaucracy attached to it, but they does allow Governments to protect services like the NHS from commercial competition. The current rules that allow competition by private companies is a result of Government Policy, not EU regulation. As long as we are in the Single Market these rules apply.

But the model of Brexit currently being pushed by most Tory leadrship contenders has us leaving the Single Market in order to do global trade deals.

This means that we will be operating under World Trade Organisation rules not EU. This is where there is some truth in Trumps tweet. The WTO has it’s own rules on opening Government contracts to private sector competition which are much harsher than the EU ones.

If we go WTO we open up the NHS to competition by private sector companies from around the world under the Plurilateral agreement. If we decide not to do this then our companies are excluded from state funded contracts globally. Which makes our global trade deals worth an awful lot less. That’s the nature of free trade deals outside of trading blocs like the EU.

While everyone was getting angry with Trump about the NHS another big healthcare story passed most people by, and didn’t generate any memes on social media.

Circle Healthcare has lost the Nottingham Independent Sector Treatment Centre (ISTC) contract.

I realise that this might not immediately leap out as something of massive importance but it brings to an end an era of NHS outsourcing dating back to the start of the century.

I’ve talked a bit about ISTCs before here, as part of a history of NHS Privatisation

The original ISTCs were introduced by the Blair Government who had inherited big waiting lists and long waiting times from the outgoing Conservative Government. They had big plans to build new hospitals and expand capacity, but needed a quick short term fix to treat the backlog of patients.

The ISTCs were supposed to encourage private healthcare companies, often from abroad, to come to the UK to areas with long waiting lists to provide additional capacity.  This was the first big attempt by the NHS to bring in big healthcare companies from the US and around the world to deliver patient services.

Wave 1 was 25 fixed sites, and 2 mobile units, and wave 2 was another 24.   It was soon apparent that there wasn’t anything like enough interest from the private sector globally to make this work, and the programme was opened up to NHS organisations to run and operate them.  By 2006 nearly all ISTCs were run by the NHS due to lack of private sector interest. 

The last remaining big private sector ISTC contract was the Nottingham one, which was held by Circle Healthcare. They had run the contract for 11 years, and was their last remaining big healthcare deal.

Circle had made the headlines a few years ago when they took over running Hinchinbrooke Hospital – the first private company to run an entire NHS Hospital – only to hand the contract back 3 years later because they couldn’t provide NHS standard healthcare and make a profit.

The events with Circle and the ISTC follows a predictable pattern for private healthcare companies:

  1. lobby Department of Health promising that they can deliver loads of great stuff for NHS patients if they get the right contract
  2. fail to provide anything like the capacity they promise
  3. do good work with routine elective work, but flounder with anything more volatile
  4. get angry with lawyers if they don’t get their own way

The decision to bring it in house is consistent with the stealth nationalisation of the NHS which is going on. While Labour angrily campaign against stealth privatisation the whole edifice of the internal market is being eroded.

This might of course change with a new PM and a crash out No Deal Brexit. But it won’t change the reality of UK healthcare – private sector companies don’t have the capacity or the appetite for whole scale private deliver of NHS services.

I am still pretty supportive of the concept of private healthcare companies providing services to the NHS, as long as they use their own capital and take their own risks. I don’t mind Government Departments outsourcing routine admin tasks either.

But private sector companies across the board have over promised, taken on contracts that were too risky and too ambitious and failed to deliver. In doing so they have damaged their own industries, with the enthusiastic help of daft politicians like Lansley and Grayling.

Rising inequality, Income, Life Expectancy and Angus Deaton.

The Institute of Fiscal Studies has commissioned Sir Angus Deaton to lead a review of growing inequality in the UK

The press have got very excited about this, and rightly so – what could be more exciting than a 2 year study mixing economics with epidemiology?

Just think of the graphs!

For those who don’t remember Sir Angus Deaton he isn’t the former presenter of HIGNFY, but the Nobel Prize winning economist who often works with his wife Prof Ann Case. Their work spans the fields of Economics and Epimedieology.

I’ve written about his work on life expectancy in the USA before:

The scope of the IFS Review is very broad:

“To give a sense of the breadth and ambition of the project, the themes to be covered here will include: which inequalities matter and why they matter; people’s attitudes towards inequality; their experiences of inequality; the political economy of inequality; the history of inequality; trends in economic inequalities; intergenerational inequalities; health inequalities; geographical inequalities; gender; race and ethnicity; immigration; early child development; education systems; families; social mobility; trade and globalisation; productivity, growth and innovation; labour markets; tax policy; and welfare policy”

This seems like a good moment to revisit 2 ideas that the review will look at – the geography of inequality and differences in life expectancy.

There is a new iteration of the Regional GDP/GVA dataset which shows how wealth is changing across different parts of the UK

These are the latest numbers for 2017 and growth is slow across most of the UK, with the exception of London. Even the South East show less than 2% growth.

This is just follows a longer term trend since the credit crunch:

London and the South East were growing faster than the rest of the UK before the credit crunch, and London has definitely grown faster since, but it is the dreadful rates of growth in places like the North East and Yorkshire and Humber that stand out. In these places the economy is stagnating significantly.

We can look at some other factors – growth since the EU referendum:

This is just a straight forward comparison of the 2 years before the referendum with the 2 years afterwards. London is actually growing faster than it was thanks to all of that QE. The economic slow down since the referendum is hitting the places that were hit hardest after the credit crunch and making regional differences worse.

GVA as a concept is similar to GDP, however it excludes the redistributive effects of tax and benefits. It show the impact of production and wealth creation, which is very similar to GDP but not exactly the same. These are chained value series which adjust for inflation.

To get an idea of how much these 2 numbers differ we can compare these 2 graphs from the IFS report:

This is a graph showing the top 1% of richest people in the UK’s share of national income:

It looks like the rich are getting richer regardless of how the economy grows. This picture, however, changes hugely when you factor in the impact of tax and benefits on incomes:

This shows an incredibly egalitarian picture (although I think the IFS have excluded the outliers of rich and poor to create this graph). Government policies such as Tax Credits have had a very significant redistributive impact.

Truly this is a triumph for socialism.

This starts to explain why the Cameron government found it so hard to cut spending. As they reduced overall Government spending the economy slowed down, particularly in places like the North East. As the economy slowed spending on benefits went up, wiping out most if not all of the cuts in Government spending. Cameron and Osborne tried to cut benefits payments, but only really succeeded in increasing poverty while still missing their fiscal targets.

We can start and look at the areas in the UK with the lowest GVA/GDP per capita:

And the highest

The slowest growing:

And the fastest growing:

The big differences leap out between urban and rural, fast growing and slow growing, old industry and new industry.

We can compare this data with life expectancy. In this case I have used life expectancy aged 65. These are the places with the shortest life expectancy for woman:

A much more familiar list of mostly urban areas

And the same data for men:

You might have spotted the far right hand column which shows the change between 14-16 and 15-17. Some parts of the UK are starting to experience a fall in life expectancy:

At Ag65  

Name Sex 2014-2016 2015-2017 Change
Orkney Islands Female 21.1 20.1 -1.0
Hart Female 23.0 22.5 -0.6
Lincoln Females 20.2 19.7 -0.5
Boston Females 20.6 20.1 -0.5
Ryedale Females 22.6 22.1 -0.5
North East Derbyshire Females 20.8 20.3 -0.5
Lewes Females 23.1 22.7 -0.4
Hinckley and Bosworth Females 22.1 21.6 -0.4
Brighton and Hove Females 21.3 20.9 -0.4
Southend-on-Sea Females 21.0 20.6 -0.4
Telford and Wrekin Females 20.3 19.9 -0.4
Clackmannanshire Females 19.3 19.0 -0.4
North Kesteven Females 21.8 21.4 -0.4
Plymouth Females 20.8 20.4 -0.4
Norwich Females 21.9 21.5 -0.4
Corby Females 19.9 19.5 -0.4
Pendle Females 20.2 19.8 -0.4
Stoke-on-Trent Females 19.8 19.5 -0.4
Christchurch Females 22.9 22.5 -0.4
King’s Lynn and West Norfolk Females 21.9 21.6 -0.4
Crawley Females 22.0 21.6 -0.3
Wycombe Females 21.6 21.2 -0.3
Runnymede Females 21.8 21.5 -0.3
Wellingborough Females 20.8 20.5 -0.3
Shropshire Females 21.6 21.2 -0.3
Worcester Females 21.8 21.5 -0.3
Mansfield Females 19.9 19.6 -0.3
Hounslow Females 21.9 21.5 -0.3
Isle of Wight Females 21.7 21.4 -0.3
Camden Females 24.4 24.1 -0.3
Rushmoor Females 20.8 20.5 -0.3
Dover Females 20.9 20.6 -0.3
South Northamptonshire Females 22.3 22.0 -0.3
Swindon Females 21.0 20.8 -0.3
Tendring Females 20.9 20.6 -0.3
Chichester Females 22.3 22.1 -0.3
Chesterfield Females 20.4 20.1 -0.3
Conwy Females 21.7 21.4 -0.3
East Lothian Females 20.7 20.4 -0.3
Hambleton Females 22.7 22.4 -0.3
Gedling Females 21.0 20.7 -0.3
Mid Suffolk Females 22.5 22.2 -0.3
Reading Females 21.2 20.9 -0.3
Islington Females 21.3 21.0 -0.3
Dundee City Females 19.3 19.0 -0.3
Chelmsford Females 21.9 21.6 -0.3
Bury Females 19.9 19.7 -0.3
Scarborough Females 21.2 21.0 -0.3
Eden Females 22.9 22.7 -0.3
East Renfrewshire Females 21.4 21.1 -0.3
Southampton Females 20.8 20.6 -0.3
Purbeck Females 22.7 22.5 -0.3

Sorry the table formatting is a bit wonky, there were so many places I wanted to highlight with falling female life expectancy that it was hard to cram them all in

This is the same data for men:

We might as well see the areas with the fastest growing life expectancy:

And men:

What this shows us is that the intersection of wealth and life expectancy is complex. It is easy to spot areas with low GVA which are low because of a lot of retired people. It is also easier to spot areas which have a fast increasing male life expectancy because they are former industrial areas which start from a very poor baseline.

But the list of areas with significantly declining life expectancy includes some very affluent areas like St Albans, which would suggest that this isn’t just about poverty, but about life style too.

A cycnic would ask the obvious question? Do we really care about inequality?

I would rather live in a society where no-one is poor and no-one is hungry but someone has a gold hat, and a society where no-one has a gold hat, but some people are poor and hungry.

I was brought up with the view that socialist politics that are rooted in working class communities concern themselves with tackling poverty, while socialist politics rooted in middle class neurosis concerns itself with tackling inequality

But in this case we can look to the USA and see that the combination of economic decline and declining life expectancy in non-college graduate, non-hispanic white populations has reached shocking levels.

We can see in the data above that we are starting to develop the same patterns of inequality of income and life expectancy that the USA is, although in the UK the picture is more complex.

Maybe we should get ready for the rise of a UK Trump articulating the grievances of non-college graduate white UK voters?