2 From All According to Their Ability, To All According to ther Need

The NHS guaranteed all necessary and effective treatment and care free to the whole population as a human right, regardless of tax or insurance status, funded from taxation, limited only by what medical science made possible, and what the nation as a whole could afford. Persuading people to share equally in adversity has never been a problem, in Britain or anywhere else. Difficulties begin when they must be persuaded to accept poverty for themselves, side by side with visible extravagance for their “betters”. Talk about “rationing” in such circumstances is at best confusing, at worst hypocrisy. Compared with today, Britain in 1948 was a poor country; food was still rationed tighter than during the war, one fifth of our housing stock was destroyed by enemy action, and all our basic industries were clapped out from years of taking out profits without forward investment in equipment or staff training.

By 1948 the leaders of the BMA were denouncing the proposed NHS as a monstrous intrusion by government into their private world of doctor-patient relationships, conscription of an honourable profession to a subordinate role as powerless civil servants. They were supported by the Conservative Party, which voted against the NHS Bill at its second and third readings in parliament in 1946, and voted again against implementation of the Act in February 1948.

Despite Bevan’s repeated guarantees of clinical autonomy for both family doctors and specialists, and a massive majority in favour of the NHS Act in parliament, the BMA chose defence of “clinical freedom” as its rallying cry for opposition to the new service. One BMA leader described the NHS as “a step toward Nazism as practised in Hitler’s Germany”. Only four months before the NHS was due to start in 1948, the BMA was still refusing even to negotiate with the Minister, a stand endorsed by 9 out of 10 GPs on an 84% vote. BMA chairman Dr Guy Dain declared:

“The Act is a paper service and nothing more. The people who have been promised a free-for-all service available to everybody are going to be very disappointed. The service will not and cannot be there on 5th July or any reasonably approximate date… The failure of the service must recoil on the people who produced it well knowing that it was impossible to implement”.


Referring to such attitudes among the majority of doctors, Bevan’s speech in parliament is worth quoting :

“I think it is a sad reflection that this great Act, to which every Party has made its contribution, in which every section of the community is vitally interested, should have so stormy a birth. I should have thought, and we all hoped, that they would have realised that we are setting their feet on a new path entirely, that we ought to take pride in the fact that, despite our financial and economic anxieties, we are still able to do the most civilised thing in the world – put the welfare of the sick in front of every other consideration.

Two months after the appointed day, 93% of the population was enrolled, reaching 97% by the end of the year. In spite of themselves, the doctors’ feet were indeed set on a new path entirely. They learned from their own experience that release from fee- earning improved rather than impaired doctor-patient relationships. Public service enabled them to serve more people more effectively, at lower cost to the nation, with greater personal security and integrity than they ever had in private practice. By the end of the 1960s, most were supporting the NHS as vigorously as they had once opposed it, and so they have remained.


From the beginning, Conservatives denounced the whole idea of a free service as utopian and unworkable, a violation of human nature, and a sure road to bankruptcy. According to them, wherever the State undertook to provide what might otherwise have been produced and sold for profit by entrepreneurs, unit costs and bureaucratic overheads would rise, quality would fall, and personal responsibility would disappear. Administrative costs were bound to soar and efficiency bound to decline. Wherever medical care was still sold as a commodity, it fetched a high price in the market, at least from those who could afford it; so at zero price demand would be infinite. Wherever suppliers were guaranteed support from the State, they produced regardless of cost, so professional demands would be limitless.

Experience proved all these forecasts wrong. Although all medical care was completely free until 1952, and prescription charges from 1952 to 1979 were too low to have much deterrent effect, zero prices did not lead to infinite demand. This could have been anticipated by anyone who understood that medical care incurs human costs even at zero price (going to a doctor is not like eating ice cream) and that professional claims that medical care was not just a business were not wholly hypocritical. Figures 1 & 2 show how Britain compared with other economically developed countries for total health service costs as a percentage of Gross National Product, and the percentage of health service costs borne by public expenditure, in 1975 and in 1987, just before NHS “reform” pushed us back to the marketplace.

Figure 1. Total expenditure on medical and nursing care as percent of Gross National Product in 22 OECD countries, 1975 and 1987, ranked by total cost % GNP 1987.

Country 1975 1987
USA 8.4 % 11.2 %
Sweden 8.0 % 9.0 %
Canada 7.3 % 8.6 %
France 6.8 % 8.6 %
Netherlands 7.7 % 8.5 %
Austria 7.3 % 8.4 %
Germany F.R. 7.8 % 8.2 %
Iceland 5.9 % 7.8 %
Switzerland 7.0 % 7.7 %
Norway 6.7 % 7.5 %
Irish Republic 7.7 % 7.4 %
Finland 6.3 % 7.4 %
Belgium 5.8 % 7.2 %
Australia 5.7 % 7.1%
New Zealand 6.4 % 6.9 %
Italy 5.8 % 6.9%
Japan 5.5 % 6.8 %
Portugal 6.4 % 6.4 %
UK 5.5 % 6.1 %
Denmark 6.5 % 6.0 %
Spain 5.1 % 6.0 %
Greece 4.1 % 5.3 %

Figure 2. Public expenditure as % total expenditure, 22 OECD countries, 1975 and 1987, ranked by public expenditure as % GNP 1987.

Country 1975 1987
Norway 95 % 99 %
Sweden 90 % 91 %
Iceland 90 % 88 %
UK 91 % 87 %
Denamrk 92 % 87 %
Irish Republic 83 % 86 %
New Zealand 84 % 83 %
France 76 % 78 %
Finland 76 % 78 %
Finland 79 % 78 %
Italy 86 % 78 %
Netherlands 77 % 78 %
Germany F.R. 79 % 77 %
Belgium 79 % 76 %
Canada 77 % 75 %
Greece 61 % 75 %
Japan 73 % 73 %
Australia 63 % 72 %
Spain 71 % 72 %
Austria 76 % 68 %
Switzerland 68 % 67 %
Portugal 59 % 61 %
USA 43 % 41 %

Figs 1 & 2 from Table 1, Schieber GJ, Poullier J-P. Overview of international comparisons of health care expenditures. OECD Policy Studies No.7 Health care systems in transition. Paris: OECD 1990. pp.9-15.

Figures 1 & 2 suggest that the more medical care is socialised and freely accessible to all of the people, the cheaper it is to provide. Comparing the UK, where 87% of all spending on medical care was met by the State, with the USA, where the State met only 41% of costs , total medical spending in Britain was about half as much as a proportion of GNP, and about one quarter as much per head of population. Other countries in this table showed less dramatic contrasts, but generally followed the same pattern.

There are simple and obvious reasons for this. Once any service is made freely available to the entire population as a human right, it is cheaper to give than to sell. No one has to be employed to collect the money, to make sure nobody gets care without paying for it, or to promote the product to maintain profits. Nobody has to collect profits, opportunities for fraud are minimised, and (though this is unimaginable to antisocialists) many if not most people work more conscientiously in a public service run to meet serious human needs, than for managers running a business for profit.

Despite cocksure predictions of inflated bureaucracy in the socialised NHS, this never occurred until Conservative “reforms” began forcing the NHS back to the marketplace in 1990. Within a broad national plan for rational distribution and integration of specialist facilities, and for equal distribution of general practitioners (both largely achieved in the first 20 years), clinicians were allowed to develop their work in their own way, with minimal interference from management. Administrative costs were consequently small, running at about 2% of all NHS costs in the first two decades, and about 6% after the reorganisation of 1974. Compare this with administrative costs of about 23% of all spending on medical care in the state-subsidised competitive market in USA , where even after the Clinton reforms, each doctor will relate to ten or more different insurance agencies, and each claim for fees must be verified. Predictably, since managed competition was imposed on the NHS by Conservative “reform”, administrative costs have risen, from about 6% of NHS costs when Thatcher came to power in 1979, to nearly 11% in 1994, and are still rising. Between 1987 and 1993, years of the “reform”, total administrative costs more than doubled, from £1.44bn a year to just over £3bn. Over the same years, senior management costs rose from £25.7m to £494m. Because of the lack of accountability enjoyed by consultants and GPs in the old NHS, it was under-managed. Serious planning, based on evidence from good information systems, requires staff who must be paid, and a reasonable rise in costs was necessary and justifiable; but this is not what happened in the internal market. Middle management in private industry expects annual incomes over £100,000, and senior management starts at £300,000. Remodelling the NHS on business lines has incurred wholly unnecessary costs, which have damaged morale throughout the service.