frontline 17.

Bled Dry: Prescription Charges and NHS Privatisation

The G8 agenda is privatisation and the spread of neo-liberalism worldwide. This means pain for developing nations but also the destruction of hard fought for welfare services in the West. Gary Fraser of Edinburgh East and Musselburgh SSP branch looks at what it means for the NHS.

The Scottish Socialist Party has recently launched a Bill in parliament calling for the end of NHS Prescription Charges. Readers of the Scottish Socialist Voice will be familiar with the SSP arguments and I do not intend to go into them in this article. What I do intend to do however, is to frame the demand for abolishing NHS Prescription Charges within a wider social, political and economic context. Therefore the focus of this article will be to relate the abolition of prescription charges to the current project of privatisation in the NHS. By advocating a demand for universalism, the SSP’s radical policy goes against the grain of the current political orthodoxy regarding the NHS. This orthodoxy is connected to the neo-liberal project to roll back the social state. It is for this reason that Labour will oppose the SSP’s bill. Labour, like the Tories before them are one hundred per cent committed to the ideological break up of the NHS and this article will explore in detail the effects of Labours NHS policy in practice. The bulk of this article, and indeed the inspiration for writing it, are indebted to the book ‘NHS Plc’ by Allyson M Pollack, which provides a powerful critique of contemporary thinking about the NHS. Polemical and at the same time critical, always at the level of deconstructing policy as opposed to sloganeering, ‘NHS Plc’ is one of the most important books written on the health service and should be widely read by all of those who care about the future of our public services.


The ideas behind the current marketisation of our public services are based on a neo-liberal way of thinking that seeks to break the social aspect of the state. This thinking has been the central policy discourse in Britain now for three decades. To conceptualise the attacks on the social state I would like to introduce the reader to the French sociologist Pierre Bourdieu 1930-2002, (Bourdieu is in my mind, one of the leading left intellectuals of the last twenty years whose work provides new insights into contemporary socialist and Marxist debate). Bourdieu conceptualises the ‘left hand’ and ‘right hand’ of the state. For Bourdieu the ‘left hand’ represents the social aspect of the state i.e. housing, education, health, etc. The ‘left hand’ is ‘the trace, within the state, of the social struggles of the past’ (Bourdieu, 1998). The ‘left hand’ of the state is counterposed to the ‘right hand’, the agents of social control, for example, the police the army, the judiciary, etc. Neo-liberalism attempts to withdraw the ‘left hand’ whilst simultaneously strengthening the ‘right hand’ (in policy terms this can be seen in regards to anti-terrorism laws, the anti-trade union laws in Britain, the ‘moral panic’ over ‘asylum seekers’ and even discussions about young people and anti-social behaviour).

‘Anti-globalisation’ protestors, and others on the left, like Monbiot in his book ‘The Age of Consent’, make the mistake of thinking that contemporary capitalism has by-passed the state. Instead, when conceptualised dialectically what is happening is an erosion of the social state, which reflects the gains made by the working class post second world war. Bourdieu discusses the smashing of the social state in relation to the capitalist nation where it has been most successful, namely the US:

In the US, the state is splitting into two, with on the one hand a state which provides social guarantees, but only for the privileged, who are sufficiently well-off to provide themselves with insurance, and a repressive, policing state for the populace (Bourdieu, 1998).

Indeed in America many who are poor and downtrodden only know the state ‘via the police officer, the judge, the prison warder, the parole officer’, (Bourdieu, 1998). A similar process is occurring across Europe. In the name of ‘modernisation’ the neo-liberal ideologues want to take us back to a milieu that pre-dates the welfare state. For Bourdieu, ‘neo-liberalism’ is a ‘very smart and very modern repackaging of the oldest ideas of the oldest capitalists’, (Bourdieu, 1998). The current phase of privatisation now consists of sites such as health and education and is being informed by a global policy of neo-liberalism.


Before examining the ways in which neo-liberal thinking impacts on the ground in the NHS, it is necessary to start by thinking global. For it is within the sphere of global politics that the neo-liberal agenda is constructed. The ubiquitous term ‘globalisation’ is often a codename for a worldwide policy of global monetarism that is enforced throughout the planet by institutions like the World Bank, the World Trade Organisation and the International Monetary Fund. It is these institutions that enforce poor nations in the ‘south’ to introduce structural adjustment programmes, which effectively dismantle public services and pave the way for privatisation and the rolling back of the social state. The effects in practice have been disastrous with the net result being an increase in poverty and inequality (for figures see UN Development Reports 1998-2004). Often ‘globalisation’ is presented as a natural force that is beyond the control and remit of conventional politics. ‘Globalisation’ is seen as causing the death of the nation-state, the end of ideology and even the end of history! (see Fukuyama). The cultural result is a political impasse in mainstream debate and an ideological surrendering to the mantra of TINA (there is no alternative). The outcome is to create consent (albeit passive) and to weaken intellectually and physically, any resistance to neo-liberal hegemony. The idea that globalisation is beyond the frontier of the nation state is a fallacy that has rendered much of this learned political helplessness. Rather than a bypassing of the nation-state, what we see are active and heavily politicised nation-states planning and implementing global neo-liberalism. The states most active in this process are the US and the collective nation-states that form the European Union. The role of the EU is increasingly to implement from above neo-liberal policy. Alongside agriculture and food policy, draft directives currently being considered by the EU are looking at health and social care, and ‘redefining them as economic sources subject to the terms of trade treaties and competition policy’ (Pollack, 2004). The EU and the US signed the General Agreement on Trade in Services (GATS) at the World Trade Organisation. The aim of GATS is to open up public services to private companies: Negotiations were conducted in private…New Labour would give ‘enthusiastic backing’ to the list of services being out forward by the EU countries. The list included water, energy, sewerage, telecommunications, postal and financial services’ (Pollack, 2004).

In America health care companies who were facing intensified competition in the national market and consequently less profits, were keen to find new markets abroad. Commercial providers identified Europe as a key target (Pollack, 2004). The current political trajectory of the NHS is one that will lead to outright privatisation and the installation of an American health care model on Europe. The effects would be disastrous.

Anyone trying to study population planning for health services in the USA soon discovers that the concept of rationally planned service provision is entirely unfamiliar to health policy makers there. The only system they know and understand is the market (Pollack, 2004).

This method of thinking is central to understanding the policy emphasis of Labour. What is happening in the NHS is not an outright privatisation, but a gradual step-by-step approach, which if unstopped will eventually lead to a market model of health care.


In poll after poll the one institution that still regains favour with the British public is the NHS. When the Guardian newspaper asked in 2004 what was the most important political issue today, the vast majority of respondents named the NHS. I believe that the popularity of the NHS and the concern for its future is based on the fact that the NHS is one of the few institutions perceived to be separate from the market. The esteem with which the NHS is regarded is important because the value base of the health service is essentially socialist. However, as explained earlier, the NHS is undergoing a transformation, which is essentially privatisation from within. This phenomenon is not new. In fact the founding legislation of the NHS left the door open for market reforms by successive Labour and Tory governments. In the original NHS settlement… GPs were allowed to remain self-employed small businesses, as were dentists, opticians and community pharmacists. Their status as ‘independent contractors’ to the NHS was a weakness, which would be exploited by proponents of the market over the following decades (Pollack, 2004).

The introduction of prescription charges was also another weakness, which went against the founding principles of the NHS. The original legislation, the NHS Act 1946 and the National Assistance Act 1948 introduced two parallel systems of care. On the one hand the NHS would be a universal system ‘free at the point of use’, whilst under the National Assistance Act ‘local authorities would provide a subsidiary system for those in need of care and attention. Unlike the NHS this was means tested and subject to statutory change’ (Pollack, 2004). This development and the sometimes-blurry distinction between health and social care would be exploited to the full by neo-liberals hell bent on privatisation and market reforms.


Despite the original inadequacies of the NHS settlement it was not until the 1980s that the NHS underwent a major transformation. It was the Tories who introduced the internal market into the NHS. The NHS would be split into ‘purchasers’-health authorities and GPs and ‘providers’-hospitals and community services, which now became organised into ‘Trusts’ and responsible for raising their own funding (Pollack, 2004). Unsurprisingly the market reforms introduced a new business culture in the NHS with publicly owned institutions being asked to operate increasingly like private companies. The 1993 Patients Charter reflected this change of direction with the ‘patient’ now being constructed as a ‘customer’ or ‘consumer’ of health care.

One of the main privatisations under the Tories was the removal of long term care from the NHS, which subsequently created a predominantly private care industry. In 1979 the figure for the number of people in private sector care was 16%. By 2003 that figure was now 69% (Pollack, 2004). The privatisation of long-term care would be precipitated by the selling of care homes owned by the state at rock bottom prices.

The land associated with long-stay hospitals, among them many huge institutions for the care of people with mental illnesses, was sold off for golf courses, luxury homes and supermarkets, while most of the care disappeared (Pollack, 2004).

The rise of the private sector created a two-tier system of care and an increasingly nebulous distinction between health, social and personal care. Take for example the case of the private care sector… 84% of care home residents need assistance with bathing and washing, while 55% need help getting dressed and 45% using the toilet. Whereas many NHS patients would receive this free of charges for care home residents they count as ‘personal care’ and is subject to a means test, i.e. payment (Pollack, 2004). Out of all the areas of social policy, long term care for older people is one with some of the starkest inequalities and injustices.

Another key development in the NHS would be the Community Care Act 1990.The rhetoric would be ‘care in the community’ but the reality was rather different. In the same period there would be an actual drop in the number of people in receipt of community based care; for example between 1995 and 2000 there was a 22% drop in home helps and a 32% drop in the number of people receiving meals on wheels (Pollack, 2004). The 1980s and 1990s would witness the offloading of responsibility of care from the state to the private sector. This was accompanied by an increase in the number of people receiving care in their own homes, often done by family and friends, particularly women. Describing this as an ‘invisible workforce’ a report by the Royal Commission on Long Term Care estimates that 5.7 million people are providing unpaid care with 800,000working 50 hours a week or more (Pollack, 2004).


On the eve of Labours election victory in 1997 Tony Blair warned that the public had just 24 hours to save the NHS. This was a lie! Labour would stick to the Tory public spending plans for the first two years in office (which the then Tory chancellor Ken Clarke said was extreme!) and would expand on the privatisation agenda started by the Tories. The internal market has continued under Labour under the guise of public sector reform and ‘modernisation’. The two aspects of Labour policy I would like to focus on here is the Private Finance Initiative (PFI) and contracting out of the workforce within the NHS. PFI was first introduced by the Tories in 1992 and opposed by Labour in opposition. It is now central to Labours agenda for public services with hospitals, schools and community centres now being built under PFI. Labour like to boast that under PFI we have seen the largest hospital building programme ever in mainland Britain. What they omit is that it also led to the largest hospital closure programme. The PFI was paid for by major cuts in clinical budgets and the largest service closure programme in the NHS’s history’ (Pollack, 2004).

PFI is essentially a consortium of bankers, builders and service operators who raise money on the governments behalf, in return for which they get a contract to design and build a hospital and operate the supporting facilities for 30 or more years. The responsibility for paying back the debt rests with the hospital, which must pay out of its annual income. This means that money is being spent on debt repayment rather than on essential health care. The result in practice has been devastating for the NHS. PFI hospitals are more expensive because the private sector cannot borrow as cheaply as government to finance construction work. Moreover the purpose of the consortium is not public service but profits and dividends for shareholders. Additional costs include servicing new bureaucracies, which are needed to monitor contracts costs, which would not have incurred under normal government procurement (Monbiot, 2000). Hospital trusts, who pay for PFI out of their existing operational budgets have been forced to save costs by building smaller hospitals, decreasing the number of beds and charging for car parking (Pollack, 2004). According to the British Medical Association the original 14 PFI hospitals will loose a total of 3,700 beds. The BMA estimates that in England and Wales bed numbers will decline by 31%. At the new Royal Infirmary in Edinburgh there is expected to be 200 fewer beds. This has happened due to the increased costs of PFI. The new infirmary in Edinburgh is owned by a consortium of 4 companies including the Royal Bank of Scotland and cost a grand total of £990 million. Had this came out of the public purse it would have cost £180 million (Monbiot, 2000).

Alongside a reduction in beds and declining standard in health care Labours market reforms have also led to a reduction in staff and the creation of a two-tier workforce. Contracting out NHS staff to the private sector has led to increased impoverishment for much of the workforce. Cleaners, porters, and caterers now work for private companies instead of the NHS. Out of all the workers who have been contracted out 70% are women. A 2001 study of outsourced hospital work in East London found that almost all those interviewed earned less than £5 per hour. Staff taken on directly by the outside companies typically earned about 20% less than NHS staff and received reduced benefits from holidays to pensions (Pollack 2004).

The net result of Labours agenda is a decrease in beds, cutbacks on essential health care, and a two-tier workforce who have received cuts in pay and conditions and the ludicrous system of PFI whose debt will be paid for a generation. The story of Labour market reforms is a story of winners and losers. The winners are the private companies forming the consortiums like the Royal Bank of Scotland, the insurance companies, private hospital and nursing home owners, nursing agencies, pharmaceutical companies, property development companies and facilities management companies. In short big business! The losers are those who work in the health service, patients who receive cut backs on essential health care, the closing down of local facilities and a reduction in beds, and the taxpayer who will have to fork out paying for PFI for a generation. The contemporary state of the NHS is forever Labours shame.


The future of the NHS is the big issue in politics today. The current agenda of dismantling our public services is one that is happening right throughout the EU and is being imposed from above by big business and the nation-states hell bent on implementing neo-liberalism. The gains made by the working class, namely the welfare state are now being taken from us before our very eyes.

Our biggest strength in defending the value base of our public services is the public! For I think that Labour are out of touch with what the vast majority of the public think. In contemporary Scotland we face a political system at odds with a left of centre consensus that exists in public life. This consensus may not be one hundred per cent socialist, but it is supportive of public ownership (just look at any poll on the railways), and it is in favour of greater wealth redistribution. The success of the SSP depends entirely on engaging with this layer of public opinion. To do that we will need the grand internationalist vision of socialism but we also require the practical determination of a costed social policy that is opposed to the neo-liberal agenda of the mainstream political parties. It is a criticism of left wing organisations in the past to be good on vision but lacking in detail. The result is to think in slogans rather than in terms of policy. The SSP has the vision, and with small costed reforms like the abolition of prescription charges we have the detail. The task now is for the SSP to lead the left of centre consensus that I think exists in Scotland today.


  1. Pollack, A, (2004), ‘NHS Plc’
  2. Monbiot, G, (2000), ‘Captive State’
  3. Bourdieu, P, (2000), ‘Acts of Resistance'