Healthcare in Scotland: Careful what you wish for, ‘Yes’ campaigners

“Labour’s summary of the ideas […] says they “clear the way for a massive shift of resources from the NHS to private companies”. […] [P]rivate companies (Labour says) are to be enabled to asset-strip the NHS. The NHS must pay full price to the private sector, which will be allowed to pillage NHS resources.” 

This passage could easily be from any of today’s papers, but it is actually from a 1983 issue of the Times. Paranoia about secret plans to ‘privatise the NHS’ is old, quite possibly almost as old as the NHS itself. The NHS has been ‘privatised’ so many times, one wonders why there is still so much of it left. It does not take much to trigger a new episode of NHS Privatisation Paranoia (NHS-PP): Any minor organisational change that might affect the interplay of the NHS with the dreaded private sector can set it off again.

NHS-PP has many uses, it can, among other things, be deployed as a last-minute electioneering tool, a good example being the Labour Party’s 1997 slogan ‘24 hours to save the NHS’. In its most recent incarnation as a scarecrow for the Yes Scotland campaign, NHS-PP fulfils a similar role. With Westminster plotting the destruction of the NHS, the campaigners claim, Scotland’s secession from the UK is the safest way to rescue the Scottish branch of the service.

Using NHS-PP for political ends is generally cheap and easy, but for Yes Scotland, it could backfire badly. There are many good arguments for Scottish Independence, but presenting independence as a means to preserve the status quo of Scotland’s underperforming NHS is not one of them.

If your objective is to preserve that status quo, you have to campaign for maintaining the current, crooked version of ‘devolution’, which would be more accurately labelled ‘regional autonomy without accountability’. The Scottish health service is run from Edinburgh, but funded from national taxes, and it is precisely this separation of funding from decision-making which has created ideal conditions for a reform-averse feel-good health policy. Hence, while the English health service has undergone a number of difficult but ultimately successful reforms during the past decade, Scottish policymakers wrapped their health service in cotton wool. The results are not impressive. The Scottish NHS is much better equipped, better staffed and better funded than its English counterpart, and yet it lags behind on almost every available measure of outcomes or quality.

There are many unknowns on matters like currency, North Sea oil, national debt, EU membership and so on, but one consequence of a Scottish yes vote is certain: Other things equal, in order to maintain the current standard of healthcare, the Scottish tax burden would have to rise considerably. In 2006, per capita healthcare spending in Scotland was almost £300 p.a. above English levels, a gap which can only have increased in the meantime. After a secession, the bill for this extra spending could no longer be sent to London; it would have to be fully paid out of Scottish taxes.

That, of course, is not an argument against Scottish independence. The emphasis is on ‘other things equal’, and my guess is that in an independent Scotland, other things would not remain equal for long. Fiscal transparency is a good antidote to state largesse and public sector slack. Under pressure from local taxpayers, an independent Scotland might soon find itself implementing changes not too dissimilar from the market-oriented reforms that the English NHS has already undergone. This is, of course, the exact opposite of what most Yes campaigners want to achieve.

And this is not just true in healthcare. Those who see independence as a means to establish a ‘Celtic socialism’ north of the border, on the basis of the observation that statist policies seem to become more popular the further North one travels, overlook an inconvenient fact: As long as we think that somebody else pays the bill, we are all socialists. With independence, that crucial precondition would disappear. Socialism loses most of its appeal if it has to be self-funded.

Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

4 thoughts on “Healthcare in Scotland: Careful what you wish for, ‘Yes’ campaigners”

  1. Posted 30/08/2014 at 16:59 | Permalink

    As far as the NHS is concerned I find it hugely and fundamentally downright objectionable that ill-health and its treatment is used as a vehicle to provide profits for shareholders of a private company rather than any surpluses ploughed back into further investments in the NHS.

  2. Posted 01/09/2014 at 11:34 | Permalink

    @Gazwold – If a private NHS supplier can provide a better service than than the public sector, at the same or lower cost, AND make a profit (which will encourage more investment on its part), what is your objection? Who loses from this? It seems that you put your sentiment ahead of the public good.

  3. Posted 03/09/2014 at 08:41 | Permalink

    @Gazwold – I find it hugely and fundamentally downright objectionable that hunger and its alleviation is used as a vehicle to provide profits for shareholders of a private company.

  4. Posted 18/02/2015 at 17:56 | Permalink

    Excellent article. I am going through some of these issues as well..

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