This morning there is news that the NHS is abandoning many of its patient commitments. We can apparently no longer afford them. Those awaiting non-essential surgery, like cataract operations and hip and knee replacements (all of which will feel very essential to those involved) will have to wait. Brexit costs money, you see, so we can't have the NHS we want and need.
For the same reason children are suffering increased class sizes.
And the police are at breaking point.
Whilst social care is collapsing.
And every one is about a real issue, impacting real lives in ways that have real consequences. But in the sixth richest nation on earth we can no longer, apparently, afford these things. Which is ludicrous.
This is about choice. And we're making the wrong ones. And sometime that has to have political consequences. The question is when, not if. I happen to think it's sooner rather than later. And hiding behind Brexit is not going to be possible for a lot longer, because that too is going to turn messy. Then this government is in trouble, whether there's an alternative or not.
Knees won't wait.
Nor will education.
Or justice.
Let alone care.
But Brexit was just an option, with a massive cost. And sometime that will dawn on people.
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Couldn’t agree more with everything you have said.
I have recently been told that I have to pay for a particular dental treatment at my dentist because the NHS does not do this particular treatment any more. Of late, I have started to grind my teeth in my sleep (I have faced redundancy twice since 2010 and it is a constant worry), so the treatment is needed. I can’t help it.
I don’t smoke, am moderately healthy, I don’t go out and get drunk at weekends and end up at A&E. I am not obese and eat healthily (but admit to having a fondness of certain things I shouldn’t eat on occasion). I am more likely to visit my doctor only as a last resort.
My 11 year old son needs some work doing on his front teeth which now means he needs to go into hospital but it will cost £4K unless we can convice the surgeon that my son looks after his teeth and it gets the treatment on the NHS.
I could go on about my right knee which gives me almost constant pain and makes walking less of pleasure that no-one is interested in (unless I’m told it seizses up completely apparently).
The thing is I think that I have been paying into system all of my working life that I thought should cater for these eventualities. I have also looked after my self and done my bit of the ‘social contract’.
The other thing is no one told me personally when these decisions were made. I cannot recall any consultation about it either. But it is meant to be ‘Our NHS’.
All of this has dawned on me for some time.
I’m just waiting for the rest of them to catch up.
And it’s bloody frustrating.
You seem to forget that we currently have a £60bn deficit which needs to be addressed (although you will no doubt claim that we can spend / borrow as much money as we like without consequence).
Plenty of claims have been made about Brexit, few have come to fruition – until the deals are finalised, the cost (or opportunity) is unknown.
If you want to destroy wealth and the UK’s money supply clear the deficit
Is that your goal?
Well, what about the billions spent on the nuclear subs, the royal family £334,000,000 costs, the banks etc etc. Plenty of money around if there is the ‘right’ requirement. Does that not concern you as well?
These are minor considerations when one considers the amount which would reasonably be needed. Luckily if we do exit we should still have a central bank, and we’d be free even of the cosmetic restrictions imposed by the EU. There could be an upside.
Steve, I suggest you ready this, a simple exposition of what Richard has been saying with far more depth and subtlety, bit its simplicity is a virtue:
https://www.thepileus.co.uk/single-post/2017/03/28/Jeremy-Corbyn-does-not-need-to-borrow-to-pay-for-his-policies
Thanks
Andrew, it is indeed clear and straight forward. Modern Monetary Theory seems to offer a way forward but I seem to recall Richard has some reservations about it.
Only about the applications some make of it
Thanks so much for this link. I’ve been reading Richard’s illuminating blog (and the equally illuminating comments) for a couple of years and have tried many times, and followed many links, to try and understand how money works and, though I often feel I’m nearly there, I’ve never felt confident enough of my understanding to challenge the prevalent argument that we must “live within our means”. Maybe now I will, so thanks again.
I wasn’t expecting this particular topic to segue into MMT but clearly there are still way too many people who don’t understand how a modern fiat currency system works. I note there are a couple of explanations here which offer the basics but for anyone who wants to get a slightly more detailed handle on it (without getting into Bill Mitchell-style academic territory) I recommend the following two easy-to-understand YouTube presentations: one from Australia and one from the US. Both are applicable in principle to the UK.
It would be really useful if a similar presentation could be designed specifically for the UK. Maybe there is one that I haven’t come across. A possible project for Prof. Murphy’s students?
https://www.youtube.com/watch?v=XpXvfWPbkUM
ww.youtube.com/watch?v=bHQCjFebIf8 (I particularly like this one by J D Alt).
It won’t be until the Houshold Budget analogy is finally dead and buried that sovereign nations can make real socio-economic progress. I’m confident it will happen but not for a generation. Apparently Junk Economics 101 is still taught at university level.
Apologies, Richard, for going over old ground again but maybe it’s something that can’t be repeated too often.
Claims about Brexit were dismissed as Project Fear.
But then we had the predicted:
– Falling pound
– Inflation rise
– Increased warnings from industry about to make a bolt for the Single market.
– Massively decreased influence in world affairs
And today we can add:
– Spain’s veto over Gibraltar
– EU’s obvious advantage in negotiations
Far from marking the start of UK’s dash for freedom and self determination, Wednesday’s A50 notification is exposed this morning for what it is: the single biggest loss of sovereignty in a single day by any administration
Today’s publication of the EUs negotiation aims should be a massive wake up call for Leavers (but we know it won’t be).
The EU isn’t messing around. And the UK led by happy clappy Leaver politicians is wholly unprepared for what is to come.
You want to pay down the deficit? No problem, your government can just cut a cheque or an electronic funds transfer to all those it borrowed from. Or if they want paper dollars it can print up enough to serve.
Of course that would be like a bank closing up leaving it’s customers nowhere to store their money. Because that’s what deficits actually are, namely savings accounts for private persons who want a safer way to store their money than the banks can provide.
But you think a government that has the sole monopoly right to create permanent money out of nothing can somehow be “burdened” by a deficit however large? Fine, please explain how that can happen…
Hi, genuine question please. The usual reply to this approach is that if we simply print money to clear debt, do capital projects and so on then at some point it becomes inflationary. What, in your opinion, is a reasoned answer to this widely held concern?
When full employment is hit this would create inflation – but we are a long way from that
So there is a limit – but we’re a long way from it
Steve
I’m not forgetting anything.
Especially how the welfare state was set up to deal with the 5 Giants of Want, Ignorance, Squalor, Idleness and Disease and is failing because this Government in particular does not want to fund it.
HM Government has given well over £300 billion to stupid private bankers who caused the 2008 crash. If you were that well informed you’d be asking for it back – and ‘bang’ – no deficit. Or what about the tax they fail to collect from companies well documented in this blog? Or the turning a blind eye to tax havens? You seem to forget these Steve. If addressed -‘bingo’ no deficit or a much smaller one so that you could sleep better at night.
And what about this – if there was any real justice the international courts would have taken the American government to court for over deregulating their financial and mortgage sector and making it pay reparations across the world for the damage it has caused. If the Americans had waged a conventional out of control war like this they would have been expected to pay. They did it with financial weapons of mass destruction instead. And have got away with it scot free – plus bonuses.
Having had wage reductions year on year since 2010, increases in VAT, Council Taxes, NI I am now expected (without my consent after paying into a national insurance system all my working life) to pay for my and my son’s medical treatment that I need because of factors beyond my control.
It would not be so bad if wages were rising – keeping up with inflation even – but they are not. So the cost of BREXIT and American stupidity will be borne by innocent people who are already feeling the pinch. Even those of us like me who wanted to stay in the EU.
So, go on Steve – stay with your received wisdom about deficits. No need to let a few facts get in the way of your convictions eh?
As I have said many times to may different people our government does not, cannot, behave like a household, or a business . It is the creator of the currency . when did you last hear of a government cheque bouncing ? Never. That’s right because it can’t happen. Our government can never, ever run out of money . What it can do is decide , as a matter of policy how much you and I get to spend of the money we earn, however we earn it . And that is how the books are NOT balanced . Everything that is railed against on Richard’s blog – tax havens etc – are all a matter of policy and a function of decision making over curtailing spending power within different socio-economic groups in our society; and over the last thirty odd years the policy has been embedded that if the rich get richer the poor will benefit as a result of the wealth of the rich trickling down to them. Seriously that’s it in a nutshell . So now we can’t ‘ afford’ this, or that public service because there isn’t enough money. It’s nonsense . Hammond who understands only enough about money to have made enough for himself is probably the most useless Chancellor we could have in the present moment with Brexit etc . But then who else is there ………………..
“You seem to forget that we currently have a £60bn deficit which needs to be addressed (although you will no doubt claim that we can spend / borrow as much money as we like without consequence).”
Nobody who understands Functional Finance has ever said that. Perhaps instead of making up strawmen you’ll point us all in the direction of the complete and coherent official explanation of money creation and its use in the economy.
As a Senior Citizen I must put in my two-pennyworth (if that’s still allowable in these days of decimal currency).
Neither of my two knees have fully recovered yet from the fall down the Marks and Spencer escalator nearly six weeks ago which occurred because the cataracts in both my eyes are at a stage where I’m not able to judge distances correctly and the lift in the said Marks was being used at the time to ferry product from the ground to the first floor of the building. Now my sentence has finally run out of breath, I hope your rabbit dies.
And I’m sharpening my pitchfork in preparation for the Revolution which won’t occur until the English turn black with the sun, and probably not even then.
So I hope everyone is feeling as cantankerous as I am, and will await the next millennium when I shall be one thousand and fifty four and eight months and counting, and do you know if that year’s a leap year?
Sorry, I suddenly felt facetious. I’ll do better next week.
I hope those knees are better soon
So do I!
I just came across your blog because you have intervened in the GERS matter (with excellent, factual input btw of which we need a lot more) and your name recently came up among those who, like me, have been following the vibrant political scene in Scotland since indyref 2014. I had heard of your name once only in passing, some time ago – you were going to advise Corbyn and then you decided not to, if I recall.
But this is a great blog! I really appreciate your work. I shall follow and recommend to others.
If you start to follow Scottish political economy, which I truly believe the most exciting in the British Isles, may I recommend y<our have a look at Gerry Hassan (http://www.gerryhassan.com/)? He is an astute observer of things Scottish and a thoughtful writer, progressive in outlook, pro-Scottish independence but by no means enthralled with the SNP.
Generally, if you wade into the Scottish question, you are going to get plenty of brickbats, so be warned! This is the endgame for the United Kingdom, as run for the benefit of its well-encrusted elite (whose tax affairs and other anti democratic devices you have commendably exposed elsewhere). But Scotland is not just one more scam: it holds the place together. If and when Scotland leaves, the English will be forced to re examine who they are and why they put up with their rulers' rapacity, now uncloaked, those who have always persuaded them they are without national identity (as Boyle of Cambridge has well expressed: http://www.theneweuropean.co.uk/top-stories/the_problem_with_the_english_england_doesn_t_want_to_be_just_another_member_of_a_team_1_4851882), having always an Empire, or a Commonwealth, or an Anglosphere or, well anyway a Celtic fringe to lord over. If Scotland goes, there will be a constitutional crisis like no other that will rock the establishment possibly to its collapse. Not so many people are aware that if – most unlikely but just hypothetically speaking – the UK were to reapply to join the EU after leaving, they would be refused admission, for not meeting EU standards! UK would have to bin the unelected House of Lords, remove archaisms like Crown privilege and generally upgrade to standards prevailing in Slovenia and Slovakia inter al.
I look forward to reading you!
Thanks a lot
I will follow your links
And I do think the Scottish issue vital for the reasons you mention
I’m waiting for a hip replacement. So far as I know it’s still scheduled for the near future. I don’t believe the above news story is actually news, rather it’s more of an admission of existing failure grown so great that unfairly penalising the hospitals involved would create uproar even Hunt couldn’t face. I don’t think anything’s changed recently in reality, just it’s finally dawned on someone somewhere with some sense that it’s pointless trying to pretend any more.
Bill – I just had a hip replacement within the past couple of weeks. Everything went according to plan. Outstanding procedure & care from beginning to end. Couldn’t have been any better in the private sector. A model for the NHS. Unfortunately it seems to be a post-code lottery. But it proves what can and should be done nationally. One observation – at least 50% of the entire team were from both Asia and the EU; they were all brilliant. Goodness knows what the situation will be post 2020. The NHS should surely be taken out of party political control. The issue is not funding but Westminster. Anyhow, I hope your experience will be as good as mine.
I hope the recovery goes well
But I disagree on political control – the point is to take the NHS out of market control and we need inspired politicians to lead it
Regarding the comment about class sizes, my wife is a teacher at an ‘Outstanding’ school – sorry, ‘Academy’ – where the admin staff have all just been told they need to re-apply for their jobs. The school is part of a group of ‘Academies’ and apparently all admin staff in the group have been told the same.
Not quite sure how bad the cull of jobs will be but, as my wife noted, that is likely to just be the start of things. Teaching assistants next, I presume, and I wonder how long it will be before the qualified teachers begin to lose their jobs as well?
Deeply worrying
I think it’s already happening. Academies really mean loss of democratic control. If there is problem and one gets no joy from the local governors , or the academic chain, one is free to go to the Dept. for Education. Under the old system one could go to county councillors or officials at County Hall-meaning on could drive there and back in a few hours. Beyond that, there was the MP. Now they can say it’s nothing to do with me. Soon the same will apply in much of the NHS.
Looks like we might have lost Gibraltar as well https://www.theguardian.com/world/2017/mar/31/future-of-gibraltar-at-stake-in-brexit-negotiations.
I noticed
Talking back control …. For Spain
Please keep in mind, the medical news you refer to applies to NHS England.
For several years the SNP administration in Scotland has been resisting the pressure to copy the disastrous de facto privatisation of NHS England and shielding NHS Scotland as best it can from the annual reduction in the Westminster block grant.
Agreed
One of the most frustrating things about this is that continued Tory austerity offers Jeremy Corbyn and John McDonnell a clear opportunity to draw a clear dividing line between themselves and the Tories: they should announce that the next Labour govt will reverse all funding cuts to public services since 2010. For me, that’s what being “anti-austerity” really means. But Corbyn and McDonnell haven’t committed to reversing the cuts. And I think that’s one reason (although only one reason) why Labour is 20 points behind; people think they’re much the same policy as the Tories but with less competent people at the helm. Why would anyone vote for that?
Agreed
I failed to persuade them
No you didn’t fail at all in my view.
They have fallen for George Osbourne’s trap that he set when he was Chancellor.
It also seems to me that Corbyn and McDonnell seem to be still chasing after the swing voter rather than this core of natural Labour voters they tell us is out there.
This is what I cannot get my head around at all. Keeping to Tory spending pledges may have helped New Labour to get in in the late 1990’s.
But this is a different era we are in now and people are much less better off than they were then. I have not known anything like it since the early 1980’s.
Having just read the dire news contained in this story about customs processes and resource requirements that HAVE to be in place before Brexit, Richard, I certainly hope some of the money saved from NHS rationing is being given to HMRC. As I noted yesterday in the context of passports and driving licences, here’s another real-life example of the downside and costs of Brexit that cannot be wafted away by the Daily Hate and other Brexit media and supporters as ‘talking the UK down’. This is the real nitty-gritty of Brexit, every bit of which has been entirely ignored until now.
https://www.theguardian.com/politics/2017/mar/31/uk-ports-struggling-fivefold-rise-customs-brexit-hmrc-mps-declaration
This one is staggering
And there is a chance that it will crash the economy
No risk there then
Given the complexity of the OU course production process we use a very similar traffic light system to that used in HMRC and elsewhere across government, and I can tell you for certain that a project flagged amber/red will not hit its planned launch date in over 95% of the cases, Richard (and I speak from long experience). At the OU were a project to be in such a position – as happened to a course I worked on through last year – we agree a revised and realistic launch date and begin a process of putting in place measures to counteract as much as possible negative impacts (e.g. by contact all students who registered for a course to let them know they may have to replan their masters studies). Where such actions are not taken – as happened with a major student-facing project last year – the result is almost always disaster. So, I would not for one moment want to be on the team at HMRC trying to fit this particular very square peg into a very round hole, particularly with politicians around who have absolutely no idea of how most orgainsations operate, much less a major IT system.
Totally agree Ivan
And let’s imagine the red faces now when we say “can we have more time please – we don’t have the software to use WTO rules”
All the EU has to do is say no
So instead of providing the NHS with £350M per week, Brexit might take that away from the NHS. Newspeak; another Brexit ‘untruth’. And delivering a new software system for HMRC in a year – no problem – it will be delivered ‘speedfully’.
Of course it will
And way under budget
For some rason the second link didn’t activate as it should’ve : https://www.youtube.com/watch?v=bHQCjFebIf8
No, I think that something will be ‘dawned on’ people: blame.
Cleverly and maliciously misdirected blame.
And another example of a very real scenario that Brexiteers have entirely ignored, Richard:
‘The clock is ticking on Britain’s two-year separation, but as Ryanair points out, its own flight schedules need to be fixed a year before that, effectively doubling the speed of Britain’s dash into turbulence. And many of Britain’s international flying rights do not exist outside the EU: there is no fallback agreement.
The idea of grounded planes sounds preposterous to British ears; less so to continental airlines and governments, which might appreciate a new competitive advantage. More likely is that in 12 months’ time Britain will face either the further relocation of Ryanair routes — and some of easyJet’s — or have to accept Europe’s terms for associate membership of its common aviation area.
However, with flights to Europe accounting for two-thirds of all UK air traffic, March 2019 could bring plane-free skies not seen since Eyjafjallajökull exhaled its ash in 2010. Such a scenario remains unlikely, because surely a deal will be reached. But the very possibility will make Remainers shake their heads in wonder. Britain has the largest aviation industry in Europe, and to preserve it, ministers must now beg and wheedle to reclaim its rights, which they have just signed away.’
The full story is here:https://www.theguardian.com/business/2017/apr/02/car-loan-boom-not-housing-bubble-still-could-be-crash-us-economy
The cost of Aaron Banks’ £10 million spend on Brexit may know few limits