I am a Cider Drinker*

* actually I am not, that is just a title for a blog post.

I mentioned in my analysis of the Conservative Green Paper on Public Health that they wanted to create a Department of Public Health and used behavioural economics to make us all change our behaviours to be healthy. I pulled out some of their policies including this one:

"We will treble duty on alcopops, we will significantly increase tax on super-strength beer and we will more than double tax on super-strength cider."

This is from a party who say that they will tax us less. This is a policy that will clearly affect moderate drinkers of these beverages.

I pointed out that the Conservatives say they are low tax, but they were still going to use tax as part of their "behavioural economics".

Then in this week's budget Alistair Darling did just that, he increased the tax on cider. So perhaps the Tories were right all along? Cameron certainly thought so in his response:

"Remember our tax plan for super-strength cider? When we announced it, the Chancellor's spokesman said that that was illegal. It is now official Government policy."

But then Cameron flip-flops and says:

"The Government has made a mistake. They don't understand the West Country, they don't understand this part of our country and they've got it wrong. Of course we need a higher tax on the dangerous high strength, things like White Lightning, which have as much relation to an apple as I do with Gandhi. But proper cider that people like to drink down the pub, we shouldn't be having a great tax hike on that."

Clearly the Conservatives are just that: an opposition. They oppose. That is all they do, and when the government changes its mind the Conservatives change their minds so that they still oppose the government.

Clearly the best place for the Conservatives is on the opposition benches since that is what they do best!

Higher productivity: public sector or private sector?

I have been blogging on the Conservatives' NHS policies because I agree with David Cameron that the next election will be mostly about the NHS. But that is where our agreement ends. I believe that the result of this election will be a make or break decision for the NHS, it will determine if we have a publicly owned and publicly run service, or a privately owned and privately run business.

Andrew Lansley has recently written about the main Conservative health policies in Policy Review Magazine. In this article he justifies his policy to privatise parts of the NHS using the following statement about productivity:

"we can not go on seeing productivity fall in our public services, just as it rises in the private sector"

Before we examine these claims (that the NHS has falling productivity, and the private sector has increasing productivity) note that Lansley has not given any figures for the respective productivities. This is important because if the private sector is twice as expensive as the NHS, and the private sector price decreases by 1% a year and the NHS increases by 1% a year, it will take decades for the private sector to match the NHS rate. So be careful when comparing rates of productivity.

The problem is defining productivity in a service. Productivity may be defined in manufacturing as the number of items produced per unit cost (volume output / volume input), and a new process that produces items more cheaply will be seen as an improvement in productivity. The problem is that in healthcare all work carried out must be at the highest quality, and a much higher proportion of resources must be invested in quality in healthcare than in manufacturing.

NHS Productivity

When it comes to productivity, public services present a problem because the outputs cannot usually be expressed in monetary terms. This issue is addressed by the ONS who say:

"The general framework for measuring productivity in public services is based on the relationship between inputs, activities, output and outcomes. In health, inputs are the resources used to produce health care activities, for example, medical staff, prescription drugs, and hospitals. Health outcomes are the final events produced by National Health Service (NHS) output, for example, increased life expectancy. However, it is important to recognise that other factors outside the control of the health care system also impact on health outcomes, such as smoking habits, diet and lifestyle.

Accordingly, health care output should be regarded as only the improvement in health outcomes directly attributable to the NHS."

The ONS get around this issue by measuring the change in productivity rather than the the absolute measure of productivity:

"the change in health care productivity is estimated by dividing the index of health care outputs by the index of health care inputs, using volume measures"

That is, the indexed inputs is the change in inputs (labour, goods and services and capital) from one year to the next. If productivity remains the same then the indexed outputs, the change in outputs (for example the number of procedures performed), will be the same as the indexed inputs. If the change in indexed outputs is more than the change of indexed inputs then productivity has raised, if the change in indexed outputs is less than the change of indexed inputs then productivity has fallen.

During the ten year period, 1997 – 2007, the output of the NHS has increased 52.5% (ONS). This is quite an impressive improvement, an annual average growth of 4.3%. The key figure, of course, is by how much the inputs have increased to achieve this figure. Over the period 1997-2007 the inputs increased by 59.3% (an annual average of 4.8%). ONS interpret this as a ten year fall in productivity of 4.3% in total or an annual average fall of 0.4%. This is the figure that Lansley is using when he says that there has been a "productivity fall in our public services".

Analysis of NHS Productivity

However, he is being disingenuous, or worse, he is telling a complete lie.

Firstly, if we take the ONS figures at face value, 0.4% year-on-year fall in productivity is really not much. However, I would dispute that there is a real fall at all. The fact is, in 1997 the NHS was seriously underfunded and undermanned and had had two decades of underfunding. Consequently there was a need for a lot of capital expenditure and an increase in clinical staff. Things had got so bad that increases in capital expenditure and manpower were needed simply to stand still. We have had billions in investment (an estimated £11 billion of PFI) over that period, and I would argue that if proper investment had been made in the two decades before, the level of capital investment in the decade after 1997 would not have been necessary. In short, for the decade after 1997 the country was paying the cost of underfunding and mismanagement of the previous Conservative administrations.

In the period 1998-2008 there was an increase in the numbers of doctors of 37% and a rise in the number of nurses of 21%. When you look at it this way the increase in output (52.5% for 1997-2007) showed that output increased at a higher rate than the manpower input. That means a real increase in productivity. So considering the huge capital investments over the last decade, a productivity fall (using a measure that includes capital investment) of a mere 4.3% is quite remarkable. And if you exclude capital investment the productivity would be a year-on-year increase.

Private Sector Productivity

So what about the private sector, where is Lansley getting the "rises [of productivity] in the private sector"?

The problem is that this appears to be more of an aspiration than anything else. Conservative doctrine is that the private sector is always more efficient than the public sector. It is a deeply held belief but it is rarely supported by facts. There are no published figures for the productivity of private healthcare in the UK since this is clearly considered to be "commercially sensitive". Instead, we have to look at other measures. The Healthcare Commission (now called the Care Quality Commission) said in 2006 that private healthcare did not outperform the NHS in terms of quality.

"Anna Walker, the commission's chief executive, said standards in the independent sector were "pretty much the same" as in the NHS."

So if the private sector are not providing better outcomes, then perhaps they are providing the same care as the NHS, but at a lower cost? It appears not. The British Medical Association (BMA) is spearheading the Look After Our NHS campaign under the stated goal of Publicly funded, Publicly provided. In their campaign literature they say:

• Many private NHS providers have received millions in guaranteed payments for contracts, despite treating fewer patients than planned; on average, the first wave of Independent Sector Treatment Centres delivered just 85% of activity paid for - suggesting a shortfall of £220 million on the £1.47 billion contracts
  
• New 'GP-led health centres' have been costly, enjoying on average three times the funding per patient of regular GP practices, despite in some cases very few patients registering with them
  
• Every eight cases diverted to an Independent Sector treatment centre costs the taxpayer the equivalent of almost ten cases dealt with by the NHS
  

Further, the NHS Confederation notes:

"NHS chief executives' counterparts in the private sector are paid, on average, £424,000 - around three times the average salary within the NHS."

Clearly, on these measures private sector solutions are not as cost effective as public sector solutions. To investigate whether the private sector can cut costs in treatment let's have a look at a case study.

A case study: Cataracts

Cataracts are when the lens within the eye goes opaque. The treatment for this condition is to remove the lens and replace it with an artificial lens. The operation is usually carried out one eye at a time in a day surgery and the procedure takes about 20 minutes. This is very much production line surgery, the eye surgeon can perform one operation after another. Cataract surgery is straightforward and hence it is a good candidate for the private sector to bring in innovative, cost effective solutions.

NHS hospitals are paid according to the Payment by Results
national tariff. In effect this is the average cost of each procedure averaged for NHS hospitals in England. When a patient has a cataract operation the hospital will be paid the national tariff for the procedure. (The payment may be slightly more since the Department of Health applies what is known as the Market Forces Factor to the payment. This factor varies between 1 and 1.35 and is used to adjust the payment to reflect the difference in the costs across the country.) The current national tariff for "phacoemulsification cataract extraction and lens implant", replacing a cataract, is £741 per eye.

So what about the private sector? Well, the first point to be made is that the NHS will implant a basic lens. If you choose to use private healthcare then you will be given the option of different lenses (for example to reduce UV, and even varifocal lenses) and some of these specialist lenses can significantly increase the costs of the procedure. Therefore, when comparing costs with the NHS you should only look at the lower end of the range because this will be more equivalent to the NHS treatment.

The following is not a scientific analysis, but it should be representative. I performed a Google search for "cataract + cost" and came up with the following:

Provider	Cost per eye
Advance Vision Care	£2190
Ashtead Hospital	£1550
BUPA	£1800 - £2900
Capio	£1650 - £2604
Cataract Care	£1945
Cataractsurgery.co.uk	£1300 - £1600
Consultants Eye Surgeons Partnership	£1950 - £ 2500
harleystreetdirectory.com	£1550 - £2950
Nuffield	£1950 - £2600
Spire Healthcare Hospitals	£1800 - £2900

 
This table is a mixture of actual quotes from surgeons, quotes from hospitals and clinics and general quotes from the large healthcare insurance companies. As you can see, the lowest quote is £1300, but the average cost is closer to £1800 or about 2 and a half times the NHS national tariff. Clearly the private sector has a lot of catching up to do to get to the productivity of the NHS!

It has to be said that Andrew Lansley's plan to involve the private sector more in providing NHS care comes with the proviso that the private suppliers must perform the work to the same standard and at the same cost as the NHS. The Conservative "draft manifesto" says:

"To give patients even more choice, we will open up the NHS to include new independent and voluntary sector providers – if they can deliver a service that patients want, to a high standard and within the NHS tariff, then they should be allowed to do so."

Note the use of the term independent provider rather than private provider. The results above show that the private sector will have to achieve some serious cost cutting to get their costs down to the national tariff. Or maybe the Conservatives are thinking about a different type of private provider?

Independent Sector Treatment Centres

In 2003 the New Labour government awarded contracts for 23 ISTCs in England (and one in Scotland). These facilities were run by the private sector on contracts to treat NHS patients. Initially the agreement was that the centres would not use NHS staff, but more recently the rules have been relaxed to allow NHS consultants to do some work in ISTCs.

Again, it is difficult to find published information about the productivity of ISTCs, so we have to do a bit of work ourselves. Hansard lists the statistics for the Ophthalmic Chain Cataract Initiative provided by Netcare Healthcare. This contract is worth £42 million and for this money the clinic performed 44735 operations or £939 per procedure. This is clearly more (by one quarter) than the NHS national tariff.

Another example is the Mercury Healthcare ISTC. In a paper for the Public Services International Research Unit, Jane Lethbridge says:

"In 2006, every cataract operation at the Mercury Healthcare ISTC at St Mary's Hospital, Portsmouth, cost £5,590 compared to the standard NHS price of £847. The public has so far paid £335,412 for 60 cataract operations at the private-sector centre, since it opened on December 19 2005. The same number would cost £50,820 at an NHS hospital. Mercury Healthcare has an £84m, five-year contract, with local NHS commissioners. The contract states that Mercury should carry out 1,650 cataract operations a year, but the company gets paid whether patients are referred or not. The government also pays out an extra 20% to compensate Mercury for setting up the £10m centre."

Furthermore, as mentioned above, the BMA say about ISTCs: "the first wave of Independent Sector Treatment Centres delivered just 85%" and "Every eight cases diverted to an Independent Sector treatment centre costs the taxpayer the equivalent of almost ten cases dealt with by the NHS".

Quite clearly ISTCs are not value for money, and this model the private sector is not more efficient than the public sector.

Higher Productivity: Public or Private Sector?

It is quite clear from the figures given above that the private sector is considerably more expensive than the NHS. Andrew Lansley may be right that productivity is increasing in the private sector, but it will need to have some very impressive improvements for it to reach the productivity of the NHS. When you analyse the NHS you can see that it has achieved remarkable increases in productivity since 1997, but it is the large costs of capital investment, making up for the underinvestment of the previous Conservative administrations, that has produced a very small year-on-year drop in productivity. The private sector is a very expensive option for no apparent gain in quality. So as usual, the Conservative rhetoric that the private sector is better than the public sector is clearly wrong. Furthermore, Lansley is deliberately trying to mislead the public by claiming that productivity is better in the private sector than in the public sector.

Update (16 March 2010): The Guardian supports the assertion that the private sector is not as efficient as the NHS, specifically private sector involvement in the NHS.


"According to the health select committee, the work carried out by the first wave of independent sector treatment centres (ISTCs) was 12% more expensive than it would have been had it been undertaken by the NHS. After its first three years of operation, the Manchester ISTC was delivering just 63% of the contracted work it had been paid for."


Day after day, Lansley's pathetic anti-NHS lies are discounted.

Protect our public services from creeping privatisation. Public services unions and professional associations are organising a march and rally on the 10 April in London. For more details see www.10410demo.co.uk. In addition the British Medical Association is campaigning to keep the NHS a public service, visit their site at www.lookafterournhs.org.uk.

Tories new hereo: Reagan

Daniel Hannan is stirring up some fuss with his launch of a British version of the US Tea Parties. Let's ignore the contradiction of creating a British version of an organisation named after a revolt against Britain, and look at what Hannan is saying. The following is an initial report on ConservativeHome by one of the site's editors, Jonathan Isaby:

He [Hannan] referred to the time when Ronald Reagan was asked how he could justify cutting taxes when the deficit was so large, and he recalled the President's reply:

"I'm not worried about the deficit - the deficit is big enough to look after itself".

In other words, if you bring down taxes there will be economic growth, revenues will rise and the deficit will be reduced. Reagan took a massive gamble, he recalled, and it worked, with Margaret Thatcher doing much the same thing in Britain. "We have lost sight of that wisdom," he lamented.

Now hold on a minute, Reagan's policy did not work. Search the internet for "us deficit" and you'll get an image like the following:

 

(from bushlastdayparty.com)

This clearly shows that Reagan and the two Bushes (GHW and GW) increased the US deficit, the younger Bush seemed to be extremely profligate and this graphic does not show the bank bailouts which have been inherited by Obama. The graph clearly shows that it was a Democrat, Bill Clinton, who got the deficit under control. Yet Hannan and his proto-Earl Gray Teabaggers claim that Reagan was an economic genius who we should emulate. Someone, please, save us from this lunatic!

The frightening thing is that Hannan's message, that "bring down taxes [and] there will be economic growth" (ie classic, and discredited Laffer Curve theory) is the basis of Osborne's New Economic Model.
The lessons from the Reagan years are that if we have Osborne in control of the economy, the £178 billion deficit that we have now will be looked upon by future generations with fond memories of a time when we had some deficit control.

The Nasty Party Shows Itself

Are you thinking what we are thinking?

Remember that slogan from the 2005 election? The Conservative Party could not say out loud what the right-wing was saying about immigration, so they used this phrase to try and nudge voters into thinking that the Tories would do what the right-wing thought but could not utter. That strategy failed. We all know of someone who has said "I am not being racist but..." and then go ahead and say something racist, but this is just another version of the Tories' 2005 slogan on immigration.

The current Conservative policy on immigration is deliberately vague, partly because the bulk of the immigration over the last decade has been from the EU accession states and any controls on this immigration would require that Cameron open the Pandora's Box that is marked "Europe". On EU immigration the Conservatives say they would "apply transitional controls as a matter of course in the future for all new EU entrants" which is very much a non-policy. On non-EU immigration the policy talks about "making eligible for admission those who will benefit the economy" which is essentially government policy anyway, and "an annual limit to control the numbers admitted".

A recent survey by ConservativeHome showed that their candidates for the general election placed immigration as a middling issue: more important than "help for marriage and the family" but less important than, say, "reducing welfare bills". Further, the Conservatives campaign for new voters, "Ten reasons to vote Conservative" does not list immigration at all. In response, Tim Montgomerie, the editor of ConservativeHome remarked "I'm disappointed it doesn't mention immigration".

It is clear that the right wing of the party regard immigration as a hot topic. There is also a sinister meme working its way around Conservatives that immigration over the last decade has been a deliberate act of gerrymandering by Labour. The idea started at the right-wing pressure group Migration Watch, and propagated by the Daily Telegraph who said "Voting trends indicate that migrants and their descendants are much more likely to vote Labour." Lord Tebbit, on his Telegraph blog, goes a step further, saying:

"All the evidence is that immigrants from the Third World are more likely to vote NuLab than Conservative. So is that what it was all about? Was it the most cynical dirty act of vote-rigging in our history. Was it part of an effort to change the very nature of British society?".

The right-wingers at ConservativeHome illustrated this meme with the image of a line of asylum seekers with the caption I've never voted Labour before, but I will be soon.

Tebbit, of course, was not impressed with Cameron's attitude to immigration. And neither are the grassroots Tories (The Sun survey indicates that 43% of its readers who responded thought that "immigration and asylum" was the most important issue in the election).

With the Tories slipping in the polls, Damien Green, the opposition spokesman on immigration has sought to shore up the Conservative message on immigration by saying that immigration "is out of control", and:

"If you look at the general immigration picture, it shows all the government policies and tough rhetoric are having no affect whatsoever"

He still cannot give the right-wingers the red meat that they desire, but his statements are another take on the "are you thinking what we are thing?" slogan. Green does not say what the right wing want him to say (namely tough restrictions on all immigration including from the EU, and actions to reduce the number of "illegal" immigrants already here), but he is saying "we hear you, trust us, we want what you want".

Are you thinking what I am thinking about what the Conservatives policy on immigration and immigrants will be should they win the election?

Osborne's Cuts

It is unclear whether David Cameron and George Osborne are a "good cop, bad cop" act or whether there is real disagreement between them. At the end of January David Cameron said on the BBC Politics Show:

"We're not talking about swingeing cuts. We're talking about making a start in reducing our deficit."

At the time it was odd to have such an announcement from the leader and not from the economics spokesman, and clearly it was meant to try and shore up the polls so as to not scare voters. However, the announcement was not popular with the Conservative Party's right wing which went apoplectic over the suggestion that cuts would be neither immediate nor savage.

Now, however, it appears that David Cameron is listening to his right wing. On Monday (22 Feb 2010) Cameron was interviewed by Jeff Randall on Sky News. Randall pressed Cameron hard on the issue of cuts and although the leader of the Conservative party refused to give the merest hint of how the Conservatives would implement the cuts he did say:

"Now I think two things, one is that we should start earlier. 2010, this coming year, we should make some reductions in public spending programmes, we should get on with it because it’s all very well having a plan to halve the deficit, we can all have plans for the future."

Cameron's message is getting tougher, but it still is not in the realm of swingeing cuts that the Conservative right wing require from him. Cameron is clearly maintaining his good cop image.

Enter George Osborne into the fray, in his role as the Conservative bad cop. Tonight Osborne gave the Mais Lecture at the Cass Business School. In it Osborne said:

"A credible plan is not really credible unless you're prepared to make a start on it this year."

"Those who say we should simply ignore the markets are siren voices, ­luring us on to the rocks. For an economic policy maker to rail against the unpredictable nature of financial markets is like a farmer complaining about the weather. A loss of market confidence could force dramatic tax rises and spending cuts that were indeed savage and swingeing. That would represent a loss of economic sovereignty.

"And those cuts would be far larger than the actions that are needed now in order to retain our economic freedom in the first place. Far better to be prepared and protect ourselves against the storm."

Yet again Osborne is talking down the economy. As I mentioned on an earlier blog post, the Governor of the Bank of England discounts that the country's credit rating is in danger:

'I don't believe the rating agencies are concerned, in the sense that they are not re-rating the UK and I would be very surprised if they were to do so,' he said.

He said that ratings agencies would remain somewhat 'uncertain' about the fiscal outlook for the UK economy, but the UK's AAA-rating wouldn't be down-graded.

Osborne clearly does not listen to the experts and is talking down the economy for political purposes. But clearly he is at odds with his leader. Osborne listens to the right wing and is chomping at the bit to make savage cuts.

Where will the cuts fall? The clue is in Randall's interview with Cameron. Randall, with his feet firmly placed in the mire of right wing politics, asked:

"Labour has added something like 900,000 jobs to the public sector payroll, how many of those are superfluous, how many should you get rid of?"

Cameron, as usual, ducked the question, replying with "I don’t have that figure", but it is clear that if you are a public service employee, regardless of whether you are on the front line, or in one of the important support roles, your job is at risk.

Conservative Social Care Policy

The Conservative draft manifesto on health outlines their policies on social care for the elderly. The manifesto says:

"we will allow everyone – on retirement – to protect their homes from being sold to fund residential care costs by paying a one-off insurance premium of £8,000."

That is, if people wish to receive residential care when they need it and paid by the state, they will have to pay a voluntary £8,000 retirement tax. At the time the policy was attacked. First, people pointed out that residential social care is very expensive, with the average weekly cost of social care at £980 (source: Audit Commission), so a one-off insurance payment of £8,000 is unlikely to pay for the care that will be needed by the average person. The other criticism of this policy is that it is specifically for residential care and does not cover care in the home, which the Audit Commission says is the most cost effective solution. Further, some charities said they were worried that it would lead to people being admitted to residential care before they are ready for such a move. They point out, quite rightly, that most people want to remain in their own homes as long as possible, but if the Conservative plan had no provision for care in the home it would mean that as soon as an elderly person needed help they would have no option other than to go into residential care.

The Labour government is trying to formulate a policy on social care and recognises that there are the twin problems of the need for flexible care on the one hand and the cost of such care on the other. For this reason the current green paper lists the options so that the public can discuss the options. The Conservatives, opportunist as ever, spun the green paper saying that Labour was planning a secret 10% death tax which would mean that every estate would pay £20,000. This resulted in the Conservatives "Death Tax" poster which has been mercilessly mocked.

The problem with the sordid affair is that the issue is complex and sensitive and affects some of the most vulnerable people in society, yet the conservatives are using tabloid gutter press politics for the sake of simple point scoring at Prime Minister's Question Time.

Let's have a look at where these figures come from. The £20,000 is in the government's green paper. The green paper lists five funding options, but when you read these options keep in mind the Conservative's hysterical noises about a "Death Tax". The options are:

1. Pay for yourself. This is the option that no one wants because it has no state help for the poor.
   
2. Partnership. In this scheme people would get a proportion of their care paid by the state, the proportion of the costs paid by the state would be higher for those on lower incomes. This option would mean that most people would have to use their own assets to pay for the remainder of the care costs.
   
3. Insurance. This is a refined version of the Partnership option where the proportion of care costs not paid by the state would be paid by insurance.
   
4. Comprehensive. In this scheme everyone would pay into a state insurance scheme, and everyone who needed care would get it for free.
   
5. Tax-funded. Social care is paid ouit of general taxation. This was rejected because of the "burden on people of working age".
   

The first and last options were rejected as unworkable, but it is interesting to note that Kelvin Mackenzie said on Radio 4's Any Questions (on the 12 Feb 2010) that the first option was his preferred option, Mackenzie, of course, often espouses the opinions of the Conservative right wing.

In the explanations for these options in the green paper, typical costs were given, as outlined here:

1. Pay for yourself. The average cost is £30,000, but 20% of people will need care that costs less than £1,000 and 20% will need care that costs more than £50,000.
   
2. Partnership. Someone who got the basic offer of a third or a quarter paid for by the state might need to pay around £20,000 or £22,500.
   
3. Insurance. People might need to pay around £20,000 to £25,000 to be protected under a scheme of this sort.
   
4. Comprehensive. The total cost of insurance would need to be between £17,000 to £20,000.
   
5. Tax-funded. No costings were given, but this option had been rejected anyway.
   

The Conservatives jumped upon the Comprehensive option. The green paper says:

"Alternatively, if people wanted to be able to know exactly how much they would have to pay, most people other than those with lower levels of savings or assets could be required to pay a single, set figure, so that people knew how much they would have to save for. As an indication of the costs, people might need to pay around £17,000 to £20,000 to be protected under a scheme of this sort compared with the average cost of care for a 65-year-old which is £30,000. The cost would be less for people who were over 65 when the scheme was introduced."

This is the source of the £20,000 "death tax" from the Conservatives. However, they omitted the paragraph that followed:

"However people paid, the insurance payment would help people to protect their wealth and the value of their homes. Whether they decided to pay during their working life, during their retirement or after they died, people would know that once they had made their contribution and paid for their accommodation, the costs of their care and support would not prevent the rest of their wealth being passed on to their children. We would also look at having a free care and support system for people of working age alongside this."

This says that the payment may be "paid during their working life, during their retirement or after they died", there is no commitment to a death tax (payment at death), that is just one of the options. Note also that the Conservatives' policy (payment at retirement) is also listed, clearly the government is trying to be open minded about this.

Anyone reading these costing will see a common thread. Of the three most likely options (Partnership, Insurance, Comprehensive) the cost to the average person will be around £20,000. So where do the Conservatives get £8,000 from? This certainly seems a case of Cameron promising jam tomorrow.

The Prime Minister and the Secretary of State were clearly wrong-footed by the Conservative's bizarre choice to present the green paper as a death tax. This payment option is simply one of the options and Andrew Lansley, the shadow Health Secretary, knew this because he had instigated confidential talks between himself, Andy Burnham (the Health secretary) and Norman Lamb (the Liberal Democrat health spokesman) in an attempt to seek a consensus. These talks were apparently held without the initial knowledge of David Cameron, but later when the leader of the Conservatives was informed Lansley says that the leader didn't object. Trying to reach a cross-party consensus is clearly the mature type of politics that we expect, and the sort of politics that Cameron promised us when he became leader of the Conservatives. But breaking the consensus in this way, with a hysterical poster campaign, is clearly despicable. Some MPs report that Andy Burnham was furious:

Several MPs heard Mr Burnham shout at Mr Lansley in the Commons: 'You told me you wanted to reach a consensus on this, and now your lot make wild allegations against us. You have bloody shafted me and you should be bloody ashamed of yourself. You've blown it.' One eyewitness said: 'Andy is usually so mild-mannered but he stood there laying into Lansley.'

Norman Lamb appears to believe that Lansley genuinely intended to create a consensus but was undermined by Andy Coulson, the Conservative communications chief. Whether it was Coulson, or Cameron who decided to break the consensus, it was clearly an underhanded act considering the importance of the subject and the vulnerability of the people affected.

The size of the Conservative "retirement tax" has not been ignored. The three health spokesmen were booked to discuss the issue on the BBC Politics Show on 14 February. In the video of the interview Lansley behaved abominably, showing that the Conservatives have sunk back into the nasty politics that Cameron claimed was a thing of the past. Burnham, clearly still furious about Lansley's behaviour, was reported to have refused to appear in the same studio as Lansley. It is a pity that he didn't, because it has now come to light that Lansley admitted to Norman Lamb before the interview that the plan was not workable in the form that the Conservatives had given in their draft manifesto.

According to Lamb, Lansley said that the Conservative plans were three voluntary insurance schemes:

One, which the Tories have already outlined, costing £8,000, would be for those who wish to be covered in the event they had to go into a care home. The second, said Lamb, was a new admission: a one-off payment of £10,000 to secure care for people in their own home. The third was a "cheaper, stripped down package for critical care at home"

David Cameron wasn't so keen to outline these three options at the dispatch box when he broke the consensus at Prime Minister's Question Time. However, even the third option would still not be enough to cover the costs, being half the cost identified in the green paper.

It is clear that the "death tax" poster was a political stunt. It is also clear that the Conservative policy will be seriously underfunded and unworkable. The sad thing is that there was a possibility of something that is rare in politics: a consensus, and this has been thrown away by David Cameron for the sake of cheap political point scoring at Prime Minister's Question Time.

A New Economic Model: Part 9

A New Economic Model: Eight Benchmarks for Britain.

This is my analysis of George Osborne's economic policy should the Conservatives win the next election.

8 Build a greener economy

Climate change worries all the major political parties and the Labour government has an excellent record in this area introducing the Climate Change Bill in 2008. The Labour party is committed to addressing climate change, the Conservative party, however, is divided with grandees like Lord Lawson and Peter Lilley, and senior members like David Davis denying that climate change has any human cause. Indeed, a survey by ConservativeHome shows that Conservative parliamentary candidates put climate change at the bottom of their list of priorities. Osborne knows that green policies have very little support in his party and that they are unlikely to be passed by a future Conservative government, so any policies that are presented to the public are merely for the purpose of the election.

The details:

"We will reduce UK greenhouse gas emissions and increase our share of global markets for low carbon technologies."

Laudable, but unlikely to occur with the current sceptical Conservative party. Where are the figures for a real benchmark? What are these low carbon technologies and who will provide the investment? (Remember that Osborne will cut the stimulus package.)

"We will create Britain's first Green Investment Bank, which will draw together money currently divided across existing government initiatives, leverage private sector capital to finance new green technology start-ups and back the bright ideas of the future. Lord Stern has agreed to advise us in the creation of this Bank."

Lord Stern has said that he will not be an advisor for the Conservatives. It is worrying that the Conservatives could get something like this so wrong. Don't they fact check their documents?

"We will safeguard Britain's energy security and reduce our exposure to volatile fossil fuel prices by ensuring that we have a diverse range of electricity generating capacity and a resilient energy infrastructure."

The Labour government is already doing this.

The government has already pledged to cut CO2 emissions by 80% by 2050. The country currently has a generation capacity of 75GW. In January the government announced the third round of offshore wind farms which will cost £100 billion and will generate 25GW (this is in addition to the already 8GW of capacity already being built). The Conservatives are simply saying "we will do what they are doing". Policy plagiarism. The other pledges are similar to the Labour government's pledges. In addition:

"We will increase the proportion of tax revenues accounted for by environmental taxes, but any additional revenues from new green taxes that are principally designed to change behaviour will be used to reduce the burden of taxation elsewhere."

This is a pledge on green taxes, which will not please the majority of Conservatives.

In effect, this "benchmark" is either parroting the Labour government's position, or it is providing platitudes that are unobtainable should the Conservative party have a majority of MPs in Parliament, since those MPs will be extremely sceptic about climate change. George Osborne knows this, he knows that such policy would be impossible under a Conservative government and yet he is still making it a "benchmark". A "benchmark" that he is guaranteed to fail. It is no wonder that he does not promise to resign if he fails to achieve this "benchmark".