Socialist Worker

Changing the system to benefit the rich

In the second column of our series Iain Ferguson examines the market’s effect on the welfare state

Issue No. 1985

In last week’s column, I looked at the way in which the continuation of neo-liberal policies by New Labour has resulted in the maintenance of high levels of poverty and huge increases in inequality and insecurity.

Neo-liberalism has also transformed and undermined the health and social care services which previously offered people some protection from the poverty and ill-health which the market creates.

Welfare spending has always been a problem for the rich and their neo?liberal supporters, whether Tory or New Labour.

First, while they need a healthy workforce, they bitterly resent having to pay taxes to provide for workers who become sick or disabled.

Hence the kind of campaigns to harass and bully people on incapacity benefit back into the workforce.

This failed the first time round in 1997 due to a magnificent campaign by disability activists.

Second, since the foundation of the welfare state in 1948, the bosses have hated the fact that, with the exceptions of private medicine and the pharmaceutical industry, they can’t make profits out of the system.

Third, the fact that the welfare state, and the NHS in particular, is so popular makes it difficult for them to attack it openly.


Even during the Thatcher years when individualism supposedly reigned, the annual British Attitudes Survey showed consistently high levels of support for the NHS. That meant that when the Tories introduced the NHS and Community Care Bill in 1990, they didn’t say that the main aim of the bill was to make big bucks for their friends in the care home industry.

They didn’t say that “needs-led assessment” was necessary to ensure that poor people weren’t getting a penny more than was absolutely necessary for their bare survival.

Instead, the Tories said, the aim of the bill was “the empowerment of users and carers”. It was about providing “choice” and “tailoring services to individual need” as opposed to the “one size fits all” approach of the old welfare state.

In practice, the market in health and social care has meant the opposite.

Before 1990, for example, older people often had the choice of local authority or private residential care. Now 90 percent of nursing home beds and 63 percent of residential care beds are in the for-profit sector and the option of a local authority placement no longer exists for most people.

Nor is there necessarily much choice between nursing homes. The majority of these homes are not owned by friendly, local, caring proprietors but by an ever-decreasing number of multinationals like Bupa or Four Seasons Healthcare, part of the giant Alchemy conglomerate.

Perhaps the best evidence of where the market in social care is heading is provided by a pamphlet published in 2004 by the New Labour think tank Demos.

Participation Through Personalisation is written by one-time Marxist Charlie Leadbetter, with an introduction by education minister David Miliband.

The common sense idea that services should be “personalised” – geared to individual needs – is one that no one could object to.

But an example of personalisation given by Leadbetter shows he has something rather different in mind.

Liverpool Direct was set up in 2000, as a joint venture between Liverpool council and the telecom multinational BT.

In return for BT initially investing £60 million, the council now pays BT £30 million a year to provide it with services.

For Leadbetter, it is a splendid example of “quite literally giving people a voice in their services”.

Social workers in Liverpool, members of the Unison union, saw it differently. For them, it was a glorified call centre, staffed by poorly qualified workers offering a much poorer – and much less personal – service than they were providing.

Sadly their brave and principled strike in 2004 – in defence of their clients and against their bosses’ plans to transfer them to Liverpool Direct – was defeated.

But their argument was correct. At heart, personalisation is about transferring the risks of living in an unequal society from the state onto individuals, usually those least able to manage.

That’s why every measure to resist the market in health and social care and to re-assert the basic principles of the NHS – such as Scottish Socialist MSP Colin Fox’s bill to abolish prescription charges, which will be debated in the Scottish parliament this week – deserves our support.

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