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  • Why the UK Suddenly Is Suffering from a Physician Shortage


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    A UK tax policy intended to soak the rich has caused highly specialized physicians and surgeons to retire early, depriving more than a million citizens of their services. A new report details the extent to which progressive taxation has harmed British patients.

    The NHS is in a state of perpetual crisis characterized by doctor shortages, long wait times, and rationing. The UK lost 441 general practitioners last year and had 11,576 unfilled vacancies for doctors as of last June.

    But in the last six years, 585 surgical practices have closed down, affecting 1.9 million patients. Last year alone, 138 surgery facilities closed their doors, up from 18 in 2013.

    What changed during that time? The Daily Mail explains:

    The [British Medical Association] has warned that growing numbers of GPs and consultants are taking early retirement or cutting back on work to avoid hefty pensions taxes which make it uneconomic to continue practising. Retiring GPs often create a domino effect by leaving remaining colleagues with more work, who in turn become demoralised and quit.

    The problem has been compounded by the fact that more doctors are now working part-time.

    Some members of UK society dismiss anything published in the Daily Mail. However, more socially prestigious outlets confirmed that analysis:

    An investigation [in March] by the Financial Times found widespread evidence of consultants refusing to take on extra work to clear patient backlogs fearing extra pay would bust tax allowances on their pensions contributions, triggering five-figure tax bills. …

    [T]he Department of Health conceded that around 3,500 consultants and GPs had retired early over the past three years due to pension tax charges.

    The NHS pension system is a Byzantine labyrinth of rules and regulations impossible for most people to navigate. These two videos (see below) explain the problem.

    In brief: NHS doctors have no choice about whether, or how much, to contribute to their public pension. Physicians must contribute up to 14.5 percent of procedures deemed “pensionable pay.”

    Citizens may also have a private pension plan. But since deposits are tax-deferred, the government slashed the annual limit on contributions from £255,000 in 2010-2011 to £40,000 in 2014-2015. There is also a lifetime pension limit of £1,055,000.

    To further complicate matters, a penalty kicks in on anyone earning an “adjusted income” of £150,000 annually—but that amount includes earnings and any growth in the pension plan (which is impossible to foresee).

    That can cause doctors to exceed government-mandated caps and see their income taxed at 40 to 45 percent. In some cases, they end up paying the NHS to work.

    Doctors respond to these perverse incentives the same way many rational actors would: by closing up shop. All parties agree the UK’s progressive tax policy triggered this cascading medical shortage. Matt Hancock, secretary of state for Health and Social Care, admitted, “This is an unintended consequence of a different tax change made a couple of years ago.” The policy “produced unforeseen consequences, resulting in punitive tax bills for senior doctors who carry out much-needed work,” said NHS Providers. And a spokesman for the BMA blamed “the unintended consequences of changes to the pension taxation rules.”

    If only someone had warned them.

    Politicians are aware of the problem, but they cannot offer any solutions because of envy. A government insider told The Guardian, “There’s no way any government, not just this one, is going to change the tax system to benefit people who are in the top one percent of earners.” Not even if members of that 1 percent keep the other 99 percent alive.

    The government sees only half of the equation: temporary tax revenue and short-term political advantage. A spokesperson for the Treasury confirmed this to the FT, saying that “we do have to get the balance right between encouraging saving and managing government finances, which is why we restrict the tax relief available for the highest earners.”

    For the government, it is a simple trade-off of maximizing tax revenue vs. providing “tax relief” to the wealthy.

    For half-a-million British patients, the cost is too high and too personal.

    Increasing taxes on the wealthiest Brits has harmed them in at least five ways:

    1. It reduces the supply of medical providers. This has been especially hard on specialists and the most qualified. Their high salaries reflect market demand plus the scarcity of their service.

    2. It temporarily leaves patients without a physician, delaying surgeries even longer.

    3. It closes down small shops and benefits big businesses. One-fifth of all 2018 surgical closures saw small providers absorbed by larger providers, better able to juggle the workload. Economic policies that “favor the little guy” always benefit the big guy.

    4. The consolidation favors wealthy patients, and regions, over poor ones. Practices consolidate in high-population areas with a client base sufficient to support them. This moves them farther away from rural areas and increases the travel times (and costs) of the poorest people, who rely on public transportation.

    5. It prevents doctors from taking part in the healing vocation. As World War II drew to a close, Pope Pius XII described the sublime value of medicine to the Army Medical Corps. “How exalted, how worthy of all honor is the character of your profession! The doctor has been appointed by God Himself to minister to the needs of suffering humanity,” he said. “You will bring to the sick-room and to the operating table something of the charity of God, of the love and tenderness of Christ, the Master Physician of soul and body.”

    The government should encourage highly educated specialists to use their skills to serve others. Envy-driven taxation schemes, political calculations, and overregulation hinder anyone willing to “minister to the needs of suffering humanity” in the name of the Great Physician.

    This article was reprinted with permission from the Acton Institute.

    Ben Johnson

    Rev. Ben Johnson is a senior editor at the Acton Institute. His work focuses on the principles necessary to create a free and virtuous society in the transatlantic sphere (the U.S., Canada, and Europe).

    This article was originally published on FEE.org. Read the original article.

     

     


  • Why the UK Chooses Free Trade

    In a few short weeks, Britain will begin negotiations with the EU on how we will trade in the years ahead; in the next three years, the return of Britain’s capacity for self-government will give us the chance to trade freely with the rest of the world once more. To grasp these opportunities will require confident choices.

    Sir Kenneth Clarke wrote that it is a lack of confidence, more than anything else, that kills a civilization. It would be hard to say Greece within the Eurozone, for example, is not a case in point. Countries often forget the attitudes that made them flourish: bad choices may follow leadership, and too many bad choices means demise. Freeing trade is one of the confident choices we must now make.

    Free Trade Generates Wealth

    In The Wealth of Nations of 1776, Adam Smith first uncovered why freeing trade can generate wealth for all parties involved, because countries could export what they make efficiently and import what they cannot:

    The tailor does not attempt to make his own shoes, but buys them off the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor… What is prudence in the conduct of every private family can scarcely be folly in that of a great kingdom.

    In our day, this means that by allowing farmers in the developing world, for example, to import without tariffs results in higher incomes for them and cheaper food for Britain’s poor. To trade freely, then, is to choose real social justice. Smith also showed how it is still worth choosing free trade even if we don’t expect reciprocation: a country gains just by importing things made more cheaply by others.

    Today, what a country like Britain does most efficiently is neither shoemaking nor tailoring, but the production of knowledge-intensive services. Yet these are increasingly at risk. The arrival of the “MiFID II” regulations in the City shows how EU rules are now so burdensome that, just weeks after the imposition of this 7,000-page set of regulations, firms are already moving business elsewhere (witness the InterContinental Exchange moving trades to the US). To apply Smith’s insight today must mean not only removing tariffs but being able to make our own, pro-competitive, regulation. Our inability to do so is already destroying prosperity.

    Adam Smith also knew that economies thrived on their values. And free trade is part of the greatest of these, democracy. It was no coincidence that Britain’s Corn Laws, the tariffs on imported grain which the landowning aristocracy generally supported, could only be repealed in 1846, after the Great Reform Act gave the vote to so many who had been made hungry by them.

    Limited Freedom

    But in the EU today, the man on the street finds his Parliament no longer has the authority—the sovereignty—to repeal the modern equivalents, like the Common Agricultural Policy. The free trade cause, whose defense a century ago drew tens of thousands to the streets, has been taken from the people’s hands and given to technocrats. Because free trade depended on popular representation in Parliament is why technocrats in undemocratic systems, from Brussels to Beijing, have tended to choose protectionism instead. In these systems, leaders keep subsidies and favors flowing to client groups who are protected by tariffs and regulation designed to favor incumbents—and from incumbents, these elites expect support. So it is free trade that reminds us that the building block of true internationalism is the democratic nation-state itself.

    Because the mercantilist alternative keeps incumbents at the top and tends to prevent the emergence of innovative challenger firms, growth is reduced, which in a developed country is largely the fruit of innovation. In Britain, regional inequality also follows, as big corporates, disproportionately in the southeast of England, outflank smaller firms elsewhere. This limited freedom and stalled prosperity has become the status quo.

    So Brexit has arrived at a critical time. Global economic output has slowed and trade as a share of GDP has fallen. It is not inevitable that the world’s wealth will keep growing: we forget at our peril that poverty typifies the human experience. Through the span of human history, very few states have achieved any economic growth. Prosperity is only achieved following specific choices, which need urgently to be re-made. This means choosing a self-governing, free, and free-trading state, setting rules and regulations ourselves. If Britain, and other Western countries, do not find the confidence to do this, they will lapse back into the normal state of mankind: prosperity only for elites, who maintain their grip by curtailing freedoms.

    We choose free trade, then, because that cannot be our future. In his great poem Ulysses, Tennyson imagined the Greek hero of the Odyssey, old in years but vowing once more to look out across the sea:

    There lies the port; the vessel puffs her sail… Come, my friends, ‘T is not too late to seek a newer world.

    Free exchange between free people is not just a good in itself, but makes people everywhere more prosperous. That is why, in 2018, Britain must choose free trade.

    Reprinted from CAPX.


    Radomir Tylecote

    Dr. Radomir Tylecote is Senior Research Analyst of the Legatum Institute’s Special Trade Commission.

    This article was originally published on FEE.org. Read the original article.