Nick Clegg gets it very wrong on the NHS

Chinese soldiers marching in formation

A little bit of the Chinese Army

Nick Clegg has recently come in for much unfounded and uninformed criticism. People don’t seem to understand that in a coalition you can’t keep your election pledges because of the compromises that you have to make with the other members of that coalition. If we ever have to suffer the horror of proportional representation and the consequent endless coalitions then election pledges will become meaningless, everyone will feel free to ignore them and blame it on the compromises they had to make.

What Nick Clegg has done is to bring power beyond their wildest dreams to the Lib Dems and over the last year he has used that power to rope in the worst excesses of certain sectors of the Conservative party. However there is a fundamental problem in that the Lib Dems are a party of protest, they are the anti- party. Government is entirely different to being in third party opposition, it is about having policies and implementing them, it is about being a pro- party. Some Lib Dem politicians and very many Lib Dem supporters haven’t got their head round this yet.

But one area that Nick is being spectacularly stupid is the NHS.

The NHS is desperately in need of reform, it is woefully inefficient and not very good at what it does, as anyone who has used a different first world health service will tell you. This has been pretty much universally accepted by all politicians. One problem is its sheer size, the third biggest organisation of any kind in the world after the Chinese army and the Indian railway system. It desperately need breaking down into more manageable chunks. And the good performance of those chunks in delivering excellent health care can only be achieved with a market.

Markets have been proven by mankind over thousands of years to be the best way of delivering goods and services efficiently. We have already established on this blog that the private sector working in a market is about twice as efficient as the public sector working without competition. So a properly reorganised NHS could deliver its existing service for half the money, or deliver twice the service with its ring fenced budget.

But the only way to have a market is to compete on price, otherwise it is not a market. It is only by price competition that you force organisations to be efficient and deliver value for money. And Nick Clegg doesn’t want this. He is thus utterly missing the central benefit of the proposed reforms and if it goes ahead as he wants then it just won’t work. He somehow thinks that delivering health services is “special” yet airlines are special in working in a highly safety critical industry yet they compete on price, as do many other industries that are somehow “special”.

And then we come to profit. Some misguided people seem to think that it is wrong for private suppliers of healthcare to earn a profit from doing so. Why they think this is totally beyond me. Profit is earnings and those earnings are the reward for doing a good job. If a company risks its resources to compete in a market to provide excellent service at the best possible price then they deserve all the profit they can earn from doing such a good job. The more excellent they are the more profit they will make. And if they are inefficient they will make losses and go out of business, to be replaced by better run businesses. This is exactly what our NHS wants and needs.

So there you have it: free market capitalism, competition, efficiency, profits. Exactly the medicine to create a superb NHS. Anything else is a criminal waste of taxpayers money.

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