Adam Smith Institute

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The NHS: A nationalised industry in a free market economy

It is difficult to walk past any of the NHS staff rooms at the moment without having to navigate the huge piles of ‘free stuff’ that have been left by grateful patients and well wishers. For this doctor, it has included some of the best oranges and lemon drizzle cake I have ever tasted.

I would certainly say that my colleagues appreciate the gestures – although one wryly observed that he enjoyed getting the clap from his neighbours. However, behind this outpouring some healthcare staff are left feeling uncomfortable – if the public really valued NHS staff then why are they not prepared to help when there is no pandemic on? Where is the free stuff that really matters like housing or fuel?

The asymmetry can be expressed even more simply: why can’t I charge properly for my services? My services are in demand but enjoy no special deals or protection from non-nationalised professionals, who are always eager to charge the full whack. Name me the lawyer who only charges £50-100 per hour – which is the price of a locum middle grade or junior consultant doctor? Where I live, even a plumber charges you more.

So frankly, is it any surprise that the NHS is short of doctors when we pay them so little? I don’t think my fellow NHS workers bear the railwaymen a grudge but why would anyone train 6 years to start on a salary that Google tells me is half that of a tube driver. They also get a much more generous holiday allowance and don’t have to pay for their training. Even attempts to solve the issue with key worker housing are a joke – perhaps if NHS workers can’t afford to live in an area you just have to start paying them properly. 

It would seem that a national pay bargaining, and a highly politicised system, have left doctors and nurses begging for more money rather than being able to use the market system for pay that plumbers and lawyers and accountants take for granted every day. While they have multiple firms bidding up the value of their labour, the nationalised NHS acts with monosomy power, bidding down our wages. If the CMA were paying attention they would probably start an investigation.

Hopefully in the midst of perhaps the greatest post-war crisis we are beginning to realise that decisions taken over decades have left them in an uncomfortable position that cannot be rescued quickly – no matter what is promised in Hancock's half hour. Many in the NHS hope this will turn out to be more than virtue signalling.