Author: johnredwood

 

            On Friday I met the Chairman and the CEO of the Berkshire Healthcare Trust.  Part of our discussions were about matters which are national as well as local in their impact, so I am posting this  report here as well as on my local pages.

            We met against the background of Mr Hunt announcing that in future an elderly patient coming out of hospital will be under the guidance and protection of his or her own GP, who will be responsible for ensuring their continuing care and treatment goes well. I welcomed this. The Trust replied that some GP s work on their own, and all GPs need time off, so they were sceptical about how  this responsibility works. I suggested they could help provide the backup to the GPs, with a telephone answering service with qualified people to ensure that out of hours calls can be dealt with promptly, and if something urgent is needed the right professionals can be put in touch with the patient. This did not get in the way of the GP being responsible for orchestrating the self treatment and nurse treatment needed for continuing care in his or her normal business hours, and ensuring appropriate services including emergency cover are in place.

          I explained the problems for patients – and the consequential issues for taxpayers – that the current arrangements can produce, based on conversations and case histories from my local experiences.

Problems for  patients

1. Difficulty in securing the correct supplies for continuing treatment

2. Lack of support when issuing new medical equipment for home use

3. Lack of support in providing maintenance and repair for home based  medical equipment

4. Attendance by health professionals who may not have the knowledge or information to answer the actual query of the patient, even where the query  is known in advance of the home visit

 

Problems for taxpayers

1.Wasted  home visits by people who cannot deal with the patient’s query or problem

2.Issue of supplies that are incorrect for the patients needs

3.Oversupply of items required, leading to write off at end of treatment

4.Failure to get medical equipment and reusable supplies back at end of treatment

Solutions

1. Proper analysis of patient needs on exit from hospital or on first diagnosis of a home based condition

2. Suitable training for patient where they have to use medical equipment or handle supplies for self treatment, from people who know the equipment

3. Back up supply and maintenance service for medical equipment and self treatment supplies by people who are expert in these matters

4. Attendance of nurse on visit where nursing skills are needed, with the nurse properly briefed on the treatment

5. Inventory and audit of medical equipment, to ensure return of reusable items at the end of the treatment, and safe disposal of other items.

Not all these matters require home visits. Some patients can be helped over the phone or by internet where they are happy with these methods.

 

 

 

 

 

 

          I find that the really popular part of the NHS that most voters wish us to protect and continue is the fact that most NHS service is free at the point of need , and all UK citizens are eligible for that treatment based on their need, not their means. All main political parties in the Commons – and I think UKIP – support this principle. The political debate is often about how a monopoly healthcare provider can deliver a good enough service without queues, without  high rates of hospital infection and  without bad treatment.

         There is always, however, another foolish debate about whether Conservatives secretly plan to privatise the NHS, with most people rushing to condemn any such move. Successive Conservative and Coalition governments have remained wedded to the free at the point of use  principle, and the next Conservative Manifesto will doubtless reaffirm it. Labour governments have also normally stayed true to this principle, though a former Labour government did break it by introducing prescription charges which have subsequently been accepted by all governments as a modification to the main principle. Many people are now exempted from these payments based on their own needs and resources.

         There is however, another way of looking at the Labour concern about “privatisation”. Whilst no recent government has and no future government after the  2015 election will seek to introduce charges or want to change free at the point of use, not all NHS care is delivered in NHS owned establishments by directly appointed staff. Again the irony is that the accusers over privatisation, Labour, have in office bought in private sector care for NHS patients themselves, sometimes preferring a private sector contractor to their own in house staff. All major parties accept that it may be sensible to outsource catering, cleaning, legal work or even some clinical and medical services.

        There is also one huge elephant in the room for those who claim to be against all private involvement in the NHS. That is the GP service.  The primary care GPs were never nationalised in the first place. To this day they remain as a collection of small businesses, running their own practises, with payments from the NHS under contracts for services they provide.

     As proof of their private sector status they can perform private sector work in their surgeries, offering holiday and  travel advice and vaccinations, private consultations, work for legal cases and the like for fees and charges. The GPs arrange their own properties, finance their own practises and hire their own staff. They may  run their own dispensing service to earn  additional revenue.

       The latest GP contract reminds us of their independent status, and of the controls and limits on their NHS work conduct imposed by government through the contract for services which the NHS buys. Few of those who claim to hate private involvement turn their attack on the GP model. No government has wanted to fully nationalise the GP service, and make all doctors state staff turning up for duty in NHS owned surgeries with no right to undertake private competitive medical business. Maybe this should give pause for thought when next the cries go up about the dangers and undesirability of  private involvement, and remind people that it is the no fee and charge that people most like, not the details of how the service they receive is organised.

 

              I have now received a detailed reply to my letter to the Secretary of State for Transport about HS2.

              We seem to be in agreement about current use of the line. I have long argued that there is low demand for long distance travel from London in the morning peak and back into London later in the day. The Secretary of State now confirms this, saying ” You mention outbound trips north of London in the morning peak. At present the attractiveness of commuting on long distance services out of London is relatively low”…. This seems to me to be important, as part of the case for HS2 is to spread business activity out of London.

             We are also in agreement that capacity is too small for shorter distance commuting into London, both on the lines northwards and on other lines into London as from the west via Paddington which will not benefit from HS2. The Secretary of State draws attention to other plans to deal with capacity shortages for these lines.

            The Secretary of State argues that commuters into Euston already face insufficient capacity and many have to stand. He agrees that lengthening trains can help, and is continuing with the plans to do this. The recent existing railway upgrade has increased the numbers of trains using the West coast mainline as well.  He says that an additional 36% capacity could be bought for £20bn by making further improvements to the present railway, which he thinks is not enough.

           He agrees that the forecasts for  passenger use of HS1 were too optimistic. He lays the blame for these mistakes on the fact that it was “an entirely new international service” and on the impact of low cost air travel as a competitor. In contrast he thinks that if anything the forecasts for passenger demand for HS2 are likely to prove low.

             This where our agreement runs out. The forecasts for passenger demand for HS2 rely heavily on people who would otherwise have used existing railways using HS2 instead. This is likely to lead to a fares war, which is not assumed in the forecasts for revenue and use in the HS2 prospectus. HS2 produces a huge increase in capacity, which will prove very difficult to fill in its early years.

            Currently without HS2 I have been offered a £12.50 fare to travel to Manchester Standard class, on a good range of pre booked trains on future days . Imagine what might happen to fares if there is  a very large increase in capacity. The Department has to understand that HS2 is very vulnerable to mainline price competition from  trains, just as HS1 is vulnerable to cheap airline competition. 

              Conscious that there need to be economic benefits from HS2 in the northern areas it serves, he has set up a Taskforce to work out what economic advantages a new line could bring. Other critics have said that the assessment of economic benefits attributes very large gains to relatively few extra rail journeys to there major cities.

               On Wednesday I headed west to the Forest of Dean to give an evening talk on the EU and current UK politics. My outbound train to Bristol was pretty full. The train from Bristol to Gloucester was just two carriages long, with standing room only for part of the journey. The long train to take me back at 10.30 from Bristol was practically empty. The railways have great trouble in matching capacity to demand. It seemed odd that there could not be an extra carriage on the short commuter train, and odd there were so many carriages on the late train with all the wasted cost and fuel that implied. Some say it’s to do with the need for more carriages in the morning, yet they seemed to be running fairly empty trains in both directions!

              It is also interesting when the main capacity shortfall is clearly commuting seats into London in the morning peak and out of London in the evening peak, that the answer is thought to be a new railway line to the north of the capital, but improving the existing lines to the east, south and west.

 

            Ever since Mr Carney, the Governor of the Bank of England, offered his forward guidance that interest rates will stay low for along time, the markets have been trying to prove him wrong.

            I have written before how the interest paid on the  10 year government bond or loans rose. Markets said there would need to be an early upward adjustment to the cost of government borrowing for anything other than the very short term, despite the Governor’s view. The 10 year interest rate which went below 1.5% at one point is at 2.8% today.

            Now market commentators are saying the official 0.5% short term rate will have to go up earlier than Mr Carney implied, maybe as soon as 2014. Whilst there are many savers who would welcome this, people on mortgages would not. The commentators are saying this because Mr Carney said he would not consider higher rates until unemployment fell to 7%, thinking that might not be until 2015 or 2016. Instead, unemployment has fallen again last month to near 7%, and  many think the 3 month figure could be down to 7% next year.

           Markets should remember, however, that Mr Carney did not say interest rates would be automatically raised as soon as unemployment fell. He went out of his way to say that when unemployment reached that level, the MPC would merely look again at all the facts and forecasts. The most recent figures show inflation falling at last, to levels that do not require more monetary action to curb price rises.  (Fuel prices are a different mater that we have discussed before). I suspect the Bank, should unemployment reach 7% next year, will still be reluctant to raise interest rates, until the growing recovery is well advanced.

           The official forecasts have long predicted that gilt yields or the government’s own cost of borrowing will go up. It is doing so and may do more. That is part of a long process of adjusting to the end of the Bank’s big programme of buying up government  bonds, and artifically raising their price and lowering the interest charge. The main concern of the Bank, subject to no inflationary danger, is to promote recovery. That requires skilful exit from the extraordinary actions of recent years, as Mr Carney well knows and is seeking to do.

 

              This morning  I spoke at the India Summit.

               I said that in Opposition when working on the Economic Policy Review for the Conservative party, I set out the likely rapid growth of India and China.  Just carrying forward recent growth rates for these two large economies, alongside the very poor growth of Euroland and the slower growth of the US and UK, demonstrated that India and China are going to play an ever increasing role in  the world economy and come to represent a much higher proportion of world trade. They will also wish to see this rise in economic power reflected in their position in world politics and by their representation in world fora. At a time when EU trade is performing weakly, Asian trade is rising strongly.

             The  Coalition was very receptive to this thinking. The newly elected government set out in its early days the need to strengthen the UK’s diplomatic ties and contacts with Asia. There were to be more Ministerial visits, better diplomatic representation, and more suport for the all important two way business links.

              So it has proved. Today as we met in London, the Prime Minister was on his third official visit to India with trade and investment in mind. He is planning a new British business centre in Mumbai, and taking a lead to help UK companies win contracts in the Bangalore-Mumbai Economic corridor, as India steps up its infrastructure investment.

              The UK has a lot to offer India. As India embarks on a major infrastructure programme, the UK can help plan, organise, finance and engineer major projects. India has already shown her talent as an investor in the UK, with success coming in  particular to its investment in Jaguar Land Rover.

 

 

Labour introduced the idea of a pre Budget budget in the late autumn. The old routine was to fix the spending levels in the Auutmn Statement, and then raise the money to pay for it in the budget. Post Mr Brown, the Chancellor gives an overview of spending and taxes in the Autumn Statement, as a prelude to the Budget.

Mr Brown wanted to get credit for announcing something twice. He then developed  a passion for announcing future years tax changes in advance as well, if they were favourable.  Then you could announce something several times over. There are, however, some advantages to this system. Giving people more notice than a year for changes can be helpful. Provoking discussion of tax ideas in the autumn before putting them into law the next spring can allow greater consultation. The present Chancellor set out a long term plan to cut Corporation Tax, maximising the favourable impact the cuts can have by giving current and future investors in the UK a longer view of what they will be paying.

In this spirit people can put forward their ideas for the Autumn Statement as the Chancellor mulls his judgement. It is that time of year again.

Many of you would doubtless like the Chancellor to cut spending more. Ending HS2, reducing overseas aid, making more inroads into welfare spending as jobs pick up and others spring to mind. This would allow more scope for tax cuts. How far would you go next year with spending controls?

Finding ideas for tax cuts is the relatively easy bit.  The UK is overtaxed, like most EU democracies. It has two governments for the price of three, thanks to the ever increasing tax and regualatory cost of the EU.

I favour cuts to tax rates on income, enterprise and saving. A lower CGT rate would increase receipts from this tax. Tapering Stamp Duty could help the government’s plans for more people to own their own home. Taking more people out of tax altogether, and allowing people higher up the income scale to also benefit from a higher tax free allowance, would make working more worthwhile. Rolling back green energy levies would be popular.

What are your own preferences?