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Saturday, 27 September 2014

False Teeth and Spectacles: and ISIS/ISIL

When the British National Health Service was created, in 1948, it immediately spent much more than had been budgetted. This was most obviously because a vast proportion of the population throughout previous history had suffered from appalling dentition; with a huge number of the people who became eligible for NHS dentistry having ill-fitting and ineffective false teeth. Over the next generation, preventive dental care [funded by the NHS] greatly improved the state of the people's teeth; but in 1948-50 the demand for false teeth 'free at the point of need' greatly exceeded what had been allowed for. The equivalent situation existed in the provision of spectacles; millions of people had struggled with poor eyesight and they were now entitled to spectacles, free at the point of need, So the NHS began by overspending, and the intention [expressed through the wartime Beveridge Report] that both the NHS and pensions would be funded by the National Insurance Fund to which all employed people would contribute proved to be inoperable.

Instead of building up a surplus while future pensioners were net contributors, as had been expected, the NHS took up the whole income to the Fund, and the NHS expenditure budget had to be topped up from general taxation: and so it has remained. National Insurance is now simply a second income tax that goes into the national budget, from which the NHS costs, and state old-age pensions - and social care for the elderly and necessitous - have to be paid. The costs of this complex of social provision [inflated also by other other payments of benefits] have meant that the trumpetted policy of Gideon Osborne to 'eliminate the deficit' on government spending has become a very sour joke. Under the 2010 coalition government there may have been a modest reduction in the rate at which the deficit is increasing, but even that is dubious. Government statistics are constantly being found to be outdated, for example as the result of EU rulings that the debt of Network Rail must be added to the  public debt total, and the earnings of prostitutes must be guesstimated and entered into the National Income figures.

And now comes the limited military action in Iraq - not yet in Syria - against the so-called Islamic State terror machine. This is bound to be costly: an estimate of £3 billion for this year has appeared in some newspapers. This is notionally to be debited against the government's fabled 'contingency fund'; but this is not a piggy-bank, such as the National Insurance Fund was meant to be. Each government making a budget for any year guesses how much revenue will come in to the state's coffers, and how much expenditure is anticipated; and an addition flow of cash is assumed to be available for any overspend in the period. The deficit will inevitably increase as the hundreds of millions are called upon to pay for the fuelling and equipment even of a few Tornado aircraft. David Cameron predicts that this war will continue for years; but the Tornados are due to be phased out, and the much-delayed replacement Typhoons have not been designed with a capability to replace the Tornados. So to prosecute the campaign against Isis the Tornados have to be kept operational, at ever-increasing cost. Again the short-sighted cheeseparing of politicians has ended in greater cost than was envisaged. It always happens!

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