Welfare State | ukwatch.net

Bail of the Century

Ellie Keen — Sat, 20 Sep 2008 14:58:07 +0000

As Governments step in to prop up the global financial system

SchNEWS never thought that Neo Labour would do so much to boost the welfare state. Over the last six months the government has pumped an unprecedented (and gigantic) amount of cash into the welfare system. The only trouble is that this money is not heading for the needy, but the greedy as we’re talking about the welfare state…for big business.

The country’s wealth is being squandered supporting the very company shareholders that have been arguing for years that, in Maggie Thatcher’s words, “the business of government is not the government of business.” Interfering politicians hell-bent on regulating the market only serve to hamper the competitive spirit, say the profit-hungry capitalists. Unless, that is, the interference comes in the form of hard cash designed to prop up their ailing investments at a time of crisis.

Following ‘Meltdown Monday’ and the ensuing turmoil in the corridors of global capital earlier this week, rampant free-marketeers are now clambering for more government cash to bail out the banking and financial system. And we are talking intergalactic telephone numbers. After years of sucking out huge commissions, profits and bonuses (Krug all round!), recorded losses for the banking and insurance sectors are now running at £275,000,000,000 – and it is estimated that this figure will double over the next twelve months. So far the most ‘market friendly’ governments in the world have pumped enough money into the system to cover 80% of these losses. Some analysts are estimating that Western governments will spend $1 trillion of public money bailing out the financial corporate sector and it’s shareholders. Shareholders who have been only too happy to reap the benefits in recent years, without ever worrying about how their miraculous wealth was actually being created.

It’s worth remembering how this whole mess started. Offering loans at ‘normal’ rates of interest was just not profitable enough for some banks. They chose to lend to people on lower incomes and adverse credit histories, charging a much higher interest rate. If you can borrow money at 4%, why lend it at 8% if you can charge 40% plus fees? Typically such loans were secured on people’s homes, so if they defaulted the bank could get the money back via repossession. But alas, the value of property has crashed, reducing the banks’ ability to claim the cash back upon the sale of a house (the classic confidence supported pyramid scheme collapses) – meaning they have to write off all these debts.

The cost of these ‘write downs’ has sucked up all the available cash in the system, meaning that there’s hardly any money available to borrow, leading us into the ‘credit crunch’. With two-thirds of the UK economy based on consumer spending (and most of that consumer spending taking place on the back of rocketing house prices) the system soon fell apart and we are now heading into recession – all because of the short-term profit aspirations of a banking sector we have no control over. Now the crisis is deepening as the value of these write offs start to exceed the value of the companies themselves – leading to their bankruptcy.

But never fear, the taxpayers can pay the price of all those failures! With government bailouts, shareholders’ investments are being protected at the same time that the poorest in our society will bear the brunt of any economic downturn. On Tuesday alone, the Bank of England pumped twice the annual Housing Benefit budget into the banking sector. The debt owed by Northern Rock (£17bn) would be enough to pay for 900,000 nurses for a year!

CASH CONVERTERS

Over the pond in the heart of Neo-liberal capitalism – the US of A – the numbers get even bigger. In an unexpected twist to their economic policy, the Bush Junta has brought three huge private companies into common ownership. Of course we don’t use language like ‘nationalisation’ any more – this is a much more market-friendly form of ‘conservatorship.’ In the US Fannie Mae and Freddie Mac (two of those recent purchases) are the biggest providers of secondary mortgages and they’ve really come a cropper in the recent economic crisis. Earlier in the month the US-treasury bailed them by guaranteeing their balance sheet to the tune of $3.5 trillion – that’s 200 times bigger than the Northern Rock bung and is the equivalent to ten years of US government spending on welfare.

For some time UK plc has been bunging its own wads of cash into business in the form of regeneration funding and hundreds of grants schemes for small and larger businesses alike. As the already-rich receive a new subsidy, the working poor are given a kick in the teeth. Back in April 2005, the Blair government said that it was ‘inconceivable’ for it to ‘interfere in the market place’ to prevent MG Rover going bust.

While a billion couldn’t be found to save 18,000 jobs (not that SchNEWS really minded a car company going bust), somehow they could sling 40 times that amount to bail out Northern Rock, 28 months later.

One of the arguments put forward to not helping Rover was that the business was going to make a loss of £200m. But last month Northern Rock confirmed that its loss for the last year was £585m. Clearly the message is that if you’re working class you can take a hike, but if you’re a member of the business elite you can hold the government to ransom and there’ll never be a need to worry about not having enough cash to pay your kids private school fees.

Against this backdrop, welfare benefits for the sick and disabled are, according to Neo Labour , – “no longer affordable in the modern age.” (See SchNEWS 516) Now ministers are planning to push people off Incapacity Benefit and Disability Living Allowance and into dead-end menial McJobs. If they refuse, a US-style welfare-to-work scheme is proposed where people who’ve been out of work for more than two years without ‘good cause’ will be forced to work on the cheap for various corporations in order to get their benefits (See SchNEWS 614). So a lone parent on £125 per week would earn less than £3.50 an hour for a full time working week – just 40% of the minimum wage.

The UK spends £20bn a year on these sickness and disability benefits – £5bn less than the ‘loan’ fund it donated to the banking sector in just one day. Meanwhile new cash injected into the Social Fund – a source of interest-free loans for people on low incomes, including grants to help the mentally ill return to the community and emergency loans to re-house families who’ve lost their homes due to fire or flood – stood at just £81m for the whole year.

Whilst there has been a little talk about more regulation, nobody has stood up in parliament and called for a major rethink about the way we run our economy. And no wonder – all their pensions are linked to the value of shares in the very businesses the government is propping up!

But the hypocrisy doesn’t stop there. For years we heard the same old story about how there’s never any money for a liveable benefits system or a decent minimum wage, but somehow UK plc finds billions of spare cash to support corrupt businesses that are in a mess only because of a greed that has benefited no one but their shareholders. For years we’ve heard the mantra that the free market must be allowed to run unfettered – yet the most ‘capitalist’ governments are nationalising huge companies left, right and centre. It just goes to show that capitalism is a myth and the sooner we stop wasting money propping up a failed system that will never work – the better.

Welfare Reform: what's the deal now?

Ellie Keen — Mon, 18 Aug 2008 00:00:00 +0000

Ooh, James Purnell. Those kindly eyes, that roguish smile, that cheeky little pro-war voting record. He can call me any time, but meanwhile, guys and gals, let’s satisfy our post-adolescent political lust by calling the Secretary on welfare reform.

The national drive towards reform of the benefits system has been gathering momentum over the past 18 months, with the pace stepping up from January when the Conservative party released ‘Work for Welfare’, a short proposal for some pretty draconian reforms to the current welfare state where all ‘able bodied’ men and women would be expected to work (the fact that one in four claimants of incapacity benefit are severely mentally ill clearly does not register with tory stiff-upper-lippers). Hot on the heels of this report came Purnell’s green paper, the rather more progressively titled ‘No One Written Off: Reforming Welfare to Reward Responsibility.’ Cue a tiresome little inter-party squabble with a lot of bitchy back-handing to the BBC over just whose idea it was to bring the British welfare system into the 21st century.

On first reading, both reports advocate a greater emphasis on individuals taking responsibility for and ‘earning’ their own benefits; both want to encourage more people into work and provide better checks to do so; both want a clearer distinction between the genuinely needy and those relatively able to work, those whom a medieval government might have called ‘sturdy beggars’. The net effect of the reforms is that in October 2008 a new Employment and Support Allowance will be introduced for new claimants of Incapacity Benefit and other benefits before being rolled out to all recipients.

There, the similarity between the proposals ends. It must be made absolutely clear that Purnell’s green paper treads an extremely fine line between positive reforms that empower people to work and victimisation and further isolation of already poor and vulnerable sections of society. For now, in the months pre-instigation, the proposals come through relatively successfully, with welcome additions such as a long-overdue simplification of the benefits claiming system, making it easier for genuinely needy claimants to access vital support. Until you’ve sat up with a severely physically and emotionally disable friend and watched them crying in frustration as they try to fill out the forms, you may not understand quite how vital this particular change is. The old system was designed to be complex in order to discourage fraudsters from bothering; the new system will build in more proactive checks. And about bloody time too.

The tory proposals, on the other hand, are replete with the rhetoric of disdain for the poor and needy. In the conservative worldview, people need to be stopped at all costs from ‘playing the system’; the government has a ‘moral right’ to ‘protect families’, the practical upshot of which is tax benefits for married couples, as if a silver ring ever solved anything. Quite apart from the fact that Labour’s report is massively longer and more in-depth, quite apart from the fact that it answers the conservative challenge with the diligence of a progressive government purposefully handling the difficulties of practical power, we cannot – simply cannot – have tory hardliners like Chris Grayling in charge of this delicate transitional period in the benefits system.

This welfare reform package is one that can only be successfully implemented by a socially aware, self-policing socialist party of the type that, at its best, Labour tries to be. Conservatives such as Grayling have claimed that Purnell’s proposals are a ‘straight lift’ from tory plans; they are not. If anything, the latest proposals represent a visionary re-working of a policy which, under the Tories, would further criminalise the working classes and drive hundreds of thousands into poverty, debt, addiction and despair.

Because the tories have far less idea even than the incumbent government of what real poverty really means. You can’t say ‘credit crunch’ with out baring your teeth into a snarl, and it’s going for the throat of benefit recipients trying to live on £40 per week. MPs demonstrating ‘belt-tightening’ by not demanding increases on their sixty grand salaries live in an entirely different world from people on JSA and Incapacity Benefit. The welfare state was never designed, as the tories claim, to allow ‘a young man to grow up’ knowing that ‘the state will support him’ whatever choices he makes: if you live on benefits, you are poor. Very poor, and you’ll stay poor unless your circumstances change. A life lived on benefits is a life on the breadline, a life replete with stress and starved of reward and acheivement, a life in many respects half-lived. The vast majority of people on state benefits are keen to return to work – the problem, is that many face tremendous obstacles in obtaining and retaining employment.

The conservatives’ mantra of small government, of decreasing state support in every arena in favour of ‘the family,’ will be massively detrimental to the real good that has been done in moving millions of people off benefits and over the poverty line in the past decade. David Cameron believes that:

‘The primary institution in our lives is the family. It looks after the sick, cares for children and the elderly, supports working people and the unemployed’ –

Woah there. Reading between the lines, doesn’t that mean that families should be doing the work of the state, just like they did in the pre-industrial era? Well, presumably they’re planning to reward domestic work financially, then, aren’t they, and take massive social steps to encourage social cohesiveness within all family structures, and provide equal benefits for civilly-partnered homosexual couples and married straight couples alike? No? Or, just for instance here, could it be another strategy to shove vital care structures such as ‘caring for children and the elderly, supporting working people and the unemployed’ out into the streets in order to save money? We’ve heard this one before. It was called ‘Care in the Community.’

Oh, yes. And tucked away in the pages of ‘Work for Welfare’ are some really juicy howlers, such as:

‘Equal pay audits will apply only to those firms which lose pay discrimination cases’.

Which is a logical and VITAL part of making the welfare state work for everyone, clearly. Only a progressive socialist government has the tenacity and social responsibility to make welfare reform work: we must work now to avoid handing a fledgling system based on ‘rights and responsibilities’ over to the tories, who will never understand in our lifetimes what it really means to be poor, sick and desperate.

National Health Service denies kidney cancer drugs to patients

tim — Thu, 14 Aug 2008 19:37:31 +0000

The National Institute for Health and Clinical Excellence (NICE) has ruled that patients with advanced kidney cancer will be denied four treatments on the National Health Service (NHS) in England and Wales. NICE is the government’s drugs advisory body. It ruled that the drugs—bevacizumab, sorafenib, sunitinib and temsirolimus—do not offer “value for money.”

The drugs are routinely available in the United States and in the rest of Europe. The brand name for the drugs are Avastin (bevacizumab), Nexavar (sorafenib), Sutent (sunitinib) and Torisel (temsirolimus).

More than 7,000 people are diagnosed with kidney cancer annually in the UK, and of these, around 1,700 patients will be diagnosed with advanced cancer. Although the drugs are not able to cure renal cell carcinoma or cancer that has spread from the initial tumour, they are able to extend life by five to six months.

Drugs can be prescribed on the NHS once NICE has given them approval. The body was established by the Labour government in 1999 with a remit to offer “independent” advice on drugs and clinical best practice for the NHS. However, its main criterion for assessing drugs is whether they offer “value for money” and are “cost-effective.”

In accepting or rejecting drugs for the NHS, NICE adheres to a formula called the “Quality-adjusted Life Year” (QALY). Within this, a drug is deemed to be cost-effective if it delivers an extra QALY at a cost of roughly £20,000 a year or less. The four kidney cancer drugs were primarily rejected, as their QALY was above £20,000. Extending a patient’s life by six months was deemed to be uneconomical.

Some patients in England and Wales are currently using the drugs on a trial basis pending the decision from NICE. Many of them had to wage a protracted campaign to get treatment.

Jean Murphy, a terminally ill 68-year-old from Manchester, was denied the drug Sutent despite a High Court ruling in her favour.

Murphy said, “I can’t see any reason why it can’t be funded on the National Health Service if it’s a case of living or dying. The only thing that will help me is the Sutent…. It’s like manslaughter because if I can’t get this I will die.”

Murphy was only able to get the drug this month following an anonymous donation of £10,000.

In its assessment of the drugs, NICE admitted that they provided “significant gains” in survival. However, its final ruling on rejecting the use of the drugs was strictly based on financial considerations.

Professor Peter Littlejohns of NICE said, “The decisions NICE has to make are some of the hardest in public life. NHS resources are not limitless and Nice has to decide what treatments represent best value to the patient as well as the NHS. Although these treatments are clinically effective, regrettably, the cost to the NHS is such that they are not a cost-effective use of NHS resources. Bevacizumab, sorafenib, sunitinib or temsirolimus have the potential to extend progression-free survival by five to six months, but at a cost of £20,000-£35,000 per patient per year.”

“If these treatments were provided on the NHS,” he added, “other patients would lose out on treatments that are both clinically and cost effective.”

NHS resources are limited as the result of government policy, determined by the demands of a financial elite that views funds devoted to public health as a drain on profits.

The inevitable result of the NICE policy is that patients who could be offered treatment are being condemned to death unless they can buy the drugs themselves. The decision prompted an outcry from patients, healthcare campaigners, healthcare professionals and particularly doctors who treat kidney cancer patients.

Kate Spall, an activist on behalf of cancer patients, said of the decision, “We plough billions into cancer research but the benefits of that research—some remarkable drug treatments—are not available to all who need them. Patients are disregarded and given up on because they cannot get the drugs they need.”

Professor John Wagstaff, an honorary consultant in medical oncology at the South Wales Cancer Institute in Swansea, told the media: “The possibility that we clinicians may be prevented from offering Sutent to our patients is an outrage and a devastating blow to the kidney cancer community.

“If this draft guidance is not overturned, there will be no point in me accepting referrals of patients with metastatic renal cell cancer as three quarters of patients do not gain any real benefit from interferon, leaving only the option of palliative care.

“This decision will mean that the UK will have the poorest survival figures for metastatic renal cell cancer in Europe. Sutent produces a remarkable effect on survival for patients. It is now no longer ethical or reasonable for patients to have access to treatment with only interferon.”

Two years ago, the NICE “citizen’s council”—27 members of the public who advise the body—recommended that it should adopt the “rule of rescue” as a general policy. “It is human nature to help in an emergency,” one member of the council said.

NICE rejected this principle. “There is a powerful human impulse, known as the ‘rule of rescue’, to attempt to help an identifiable person whose life is in danger, no matter how much it costs,” NICE responded in a document entitled Social Value Judgments. “When there are limited resources for healthcare, applying the ‘rule of rescue’ may mean that other people will not be able to have the care or treatment they need…. The Institute has not therefore adopted an additional ‘rule of rescue.’ ”

NICE also rejects both what it calls the “utilitarian approach” and the “egalitarian approach” in allocating health resources, in favour of its own guidelines based on “procedural justice.”

It describes the utilitarian approach as allowing an “efficient distribution of resources, but sometimes at the expense of fairness. It can allow the interests of minorities to be overridden by the majority; and it may not help in eradicating health inequalities.”

NICE defines the “egalitarian approach” as the effort to distribute “healthcare resources to allow each individual to have a fair share of the opportunities available, as far as is possible. It allows an adequate, but not necessarily maximum, level of healthcare, but raises questions as to what is ‘fair.’ But an egalitarian approach cannot be fully applied when there are limits on resources.”

According to NICE, the fundamental basis of “procedural justice” is that it provides for “accountability for reasonableness,” which is essential because the “NHS is funded from general taxation, and it is right that UK citizens have the opportunity to be involved in the decisions about how the NHS’s limited resources should be allocated.”

Having rejected the recommendation of the 27-member “citizens’ council,” NICE cannot legitimately claim that it is responding to the interests of the public. The decision of NICE to deny treatment to patients is in fact a reflection of the interests of a small plutocratic layer who can pay for their own medical treatment and have nothing in common with the majority of the population who rely on the NHS for care.