Monday, 21 June 2010

Chop or Not?

On Channel 4 tonight they had the programme 'How to save £100 billion'. It was basically about which cuts people would support and the audience voted on them. I thought, the day before the 'emergency' budget, I'd have a look at a few of them; NHS reform, VAT rise and a bank tax.

NHS - GP Charge/Privatise

There were two ideas to do with the NHS, one of them a small change, another a major shake up. I think both are bad ideas and I'll say why.
The first was an idea to charge people a small fee for every visit to the GP, the idea tonight was £10. Its a way of raising cash with a seemingly inconsequential fee and frees up the NHS  from frivolous visits by people who don't really need to see a doctor.
This might be the case but I think its still a terrible idea, and could even end up costing more. First of all, the NHS should be kept free at the point of care, that's the most fundamental principle of our healthcare, and should never be changed, no matter how trivial the amount might seem. Its a slippery slope to be on when you start charging small amounts. And one of the reasons that it should be free is that by charging, you can end up costing the NHS more as people end up more ill than they might have been. Even if someone, who maybe doesn't have much spare cash, leaves seeing there GP an extra couple of weeks to save money, then they could end up being much more seriously ill and in need of more care than they would have been.

And the more radical idea to strip down the NHS to a core product, and leave the rest to the private sector is madness. The idea that free market competition is the answer to all life's problems is pure wrong and has been shown to be so many times. Why do we always assume competition is a cure all? Competition in healthcare will lead to double standards, a private sector stripping all the lucrative services and the NHS left to pick up the cost of the necessary but costly procedures. In short, it will destroy our NHS, which despite what may be said by some, is world-class.

Bank tax

The financial crisis started in the banking industry, so its no wonder there's such a blood lust for hammering the banks with taxes. Then there's the argument that if you hammer the banks too hard then you'll drive away business, and Britain is quite heavily reliant on the banking sector for its cash.
I think we should cut a balance, but that balance shouldn't be easy on the banks, its wrong to be held to ransom by a sector that enjoyed the good times and the free cash through quantitative easing but cries foul when it's asked to pay back.

Verdict - A good source of money, and it can be put to use as a safeguard against future collapses, a sort of insurance policy. And I don't want to hear any more about, 'Ooh, the markets won't like it.' Some times you just have to think screw the markets on this one, they can deal with it.

VAT rise - Increase the standard VAT rate to 20%.

On the programme they voted for this, but decided not to spread it to items like food and books which are currently tax free. Of the possible tax rises, I think VAT increases are possibly the worst idea, if you're trying to share the burden then this completely fails. 

Those on lower incomes, the ones already struggling after the financial crisis will be hit hardest as they have the least disposable income and they are least capable of absorbing paying more for their shopping. It will look strange on the Lib Dem's behalf if they decide to vote this through. Anyone remember their poster about the Tory 'VAT bombshell' during the election campaign? Plus the fact that so many of them have come out and spoken about how VAT is the most regressive tax. 

Verdict - Cuts the deficit, but by hurting the people least able to take the pain.

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