This article is republished from the Opendemocracy website according to the terms of their Creative Commons licence
LUCY REYNOLDS 3 April 2013
On April Fool’s Day the 2012 Health and Social Care Act (HASCA) came into force. Its enactment divests our government of responsibility to ensure a comprehensive healthcare service available to everyone. Henceforth government need only “promote” universal comprehensive care, perhaps through tax-funded advertising of privately-owned services franchised to use the NHS logo.
Successive governments, assisted by the City’s privatisation industry, have gradually reorganised the NHS into a business investment opportunity for the transnational healthcare, health insurance, pharmaceutical, construction and outsourcing industries.
If the government manages to complete the legal process now underway, almost the entire NHS budget will pass through competitive markets. This arrangement awards compensation to companies ejected from the markets by any subsequent renationalisation or reinstitution of “preferred providers”. The mechanism for this is in procurement regulations which are currently under challenge in Parliament, as experts advise that they will enable the private sector to cherry-pick from the NHS budget, divert money from frontline services and destabilise traditional NHS hospitals.
If these regulations are applied to the NHS they will gradually privatise it, within a legal framework that would permanently block later renationalisation by triggering huge compensation entitlements for ejected companies. They can enforce these financial claims through UK and EU Courts against our government. This mechanism is known as the “privatisation ratchet”: the compensation mechanism stops governments from reversing the direction of change by renationalising services after the private sector has been allowed to compete to provide them.
Once NHS privatisation takes hold, we can evade such costs and renationalise it only by leaving the EU and the World Trade Organisation. If we allow this privatisation to go through as planned, it is not the Labour Party that will sweep to power in 2015: it will be UKIP.
The new system will make it easy for foreign corporations as well as home-grown outsourcers and private equity groups like Circle to cherry-pick contracts for whatever NHS services they wish. They will select activities, locations and patient groups that they predict to be profitable or strategic for developing their market share within the US-style profit-driven healthcare system that is the end state of this reform (see Oliver Letwin MP and John Redwood MP, “Britain’s Biggest Enterprise”, 1988).
As big business uses competition law to siphon profits from the NHS budget, traditional NHS providers at every level from GP to teaching hospital will be left to look after the most challenging services and medical complications from a diminishing share of the budget.
The Coalition government surely understands the outcome of introducing these regulations perfectly well: partners of two leading global competition law practices are linked to the highest levels of the Liberal Democrat Party (see here and here). The trade and competition law departments of these partnerships cater to transnational corporations seeking to tap our public services budgets, and they will rake in money from the carve up of the NHS. Meanwhile, David Cameron tasked Oliver Letwin (still an MP) with supervising the NHS reform that implements his 1988 plan.
Earl Howe and Norman Lamb have announced that the Coalition had “accidentally” introduced privatising competition law regulations. If the Coalition can’t or won’t give a credible reason for having done this following their myriad reassurances that the NHS was not being privatised, what is the true explanation? And why did they withdraw SI 257 only to issue a near-clone, SI 500, which will have precisely the same effect of forcing wholesale privatisation (here and here)?
The story that the content of the NHS privatisation regulations tells is one of the City selling out the NHS to the US trade lobby for privatisation, through the collaboration of certain members of our Parliament and their associates. Their betrayal is about to be cemented by the upcoming US-EU trade treaty which will require the privatisation of all our public services. The NHS privatisation regulations were brought to us via a Washington-mandated process of EU “harmonisation” of the legal frameworks, financing and organisation of all European national public services with the legal and organisational frameworks of the US private sector.
David Cameron announced in January that his goal for the first six months of 2013 was to seal the deal on this trade treaty. The goal of the services provisions of trade treaties is to open up public service budgets to the private sector. Canada is part of the North American Trade Treaty (NAFTA) with the USA and Mexico, but has so far managed to preserve its national health service from privatisation by establishing and then defending a claim to an exemption which has so far succeeded at each round of Canada’s treaty negotiations.
To protect the NHS, we need an exemption from this lock-in to the US economy of the type that Canada has fought for and won if we are to save the NHS from commercial pillage and destruction. (You can sign a petition to that effect here.)
Our rulers have become far too close to the City of London and its clientele of expansionist transnationals. The Coalition in Westminster is trying any way it can to hand the NHS over to new commercial owners.
Lucy Reynolds is a research fellow at the London School of Hygiene and Tropical Medicine.