Friday, 31 December 2010

Intergenerational equality - what does it mean for the NHS?

According to the Social Issues Research Centre, the over 50s in the UK now own approximately 80 percent of the nation's wealth.

One must always be sceptical about assessments of wealth ownership. People are notoriously dishonest about declaring how much they have. Nevertheless, the number has a ring of plausibility about it. Assuming that it is true, it raises a troubling issue - intergenerational inequality.

If one respects property rights, one can only grumble quietly about the fact that a disproportionate share of wealth is concentrated in the hands of a minority of ageing hippies. Nevertheless, this group has a claim on the nation's income that goes beyond property, shares and bonds. This group is also making a pitch for a disproportionate share of future government expenditure.

Over the next 20 years, health and pensions expenditure will take up an increasing proportion of the government's budget. Both these items are essentially expenditures on the over 65s. As the UK ages, pensions and health expenditure, as a proportion of GDP, will reach astronomical levels. Based on our current system of free health care and comprehensive pension entitlements, this would imply a further intergenerational transfer from the young to the old.

Somehow, I can't see that happening. Sooner or later, taxpayers and by that I mean the young, will demand comprehensive reform of social expenditure. In fact, this process has already begun. By international standards, the UK pension system isn't terribly generous.

However, the NHS has managed to escape any substantive adjustment. For practical purposes, healthcare remains free at the point of delivery. Successive governments have tried to restrain expenditure by rationing and cost control efforts. These efforts have reached a logical limit. A horde of grey-haired chronically patients are about to swamp the nation's hospitals demanding free healthcare.

The demand for intergenerational equality will inevitably lead to the demise of the NHS in its current form. There is something rather ironic about that. It was an institution created on the promise of delivering equality. It will be also destroyed by the demand for greater equality.


dearieme said...

The most interesting thing I've learnt about the NHS in the last couple of years is about its origin. The notion was Beveridge's; the Tories and Liberals adopted it swiftly but Labour only slowly and reluctantly. The consequence was that Labour's surprise election victory in '45 arrived when they had had no useful debate about how they were going to introduce an NHS. The problem was handed to the noxious Bevan, which is how we come to have a most stupidly-designed health service.

Then (my own theory, this) because of the great fluke that its introduction coincided with that of the wonderful antibiotics, the population confused the reason for the new life-saving doctoring and elevated the NHS to being the Established Church of the whole UK.

Whatever: Happy New Year, lass.

Anonymous said...

The 80% of wealth figure is distorted by the 'rich Families / old aristocracy' whose money now is usually in trust but controlled by the over 50's. I believe that some 50% of wealth is owned by 5% of population and you can bet most of that 5% is over 50.