Flawed capitalism - lobbying and corporatocracy

Capitalism, which allows money to flow and be used without constraint, has led bankers to put money into where they get the 'greatest apparent return' ...

and unfortunately these places turn out to be ones where a community with any real moral code/values would not want it to go  ... e.g. 'money for nothing' schemes/scams ... and places where people can be exploited the most.

One might think in a capitalist system that any 'money for nothing' scam would quickly and naturally collapse, but this does not happen when the excessive profits generated are 're-invested' into lobbying Governments and policy makers to gain support/favour and put them into a position where their scam can continue to flourish and/or 'cannot' fail (e.g. as the Banksters did, and continue to do, hence the bailouts and continual pressure to water down any regulation).

The problem with capitalism is that money/wealth is naturally directed towards influencing those in power, to maintain/ further their position to exploit markets. For instance this occurred with banks persuading the Government to remove house prices from UK inflation figures, which created the house price boom (as interest rates would not longer have to increase due to a rise in inflation) and saw house prices triple in a decade.  

Some people argue that the problems we are now seeing are more to do with having a Corporatocracy rather than Capitalism, as corporations use money to unduly influence and control politicians in order to introduce/change rules in their favour (e.g. by relaxing financial regulations, changing food, health and energy policies ...).

Indeed before entering office David Cameron himself highlighted that Lobbying would be the next big scandal (post the scandal relating to politicians and the media), but on entering office he decided not just ignore it but to ensure that he benefited from it!

Lobbying is indeed a big scandal (e.g. banks 'invested' £100m into lobbying last year), but Capitalism creates an environment where a Corporatocracy can thrive, and creates many more problems besides (e.g. the movement of money to exploit people to the maximum, and the ability to move any wealth to tax havens in order to avoid paying any tax etc). 

Corporatocracy is indeed a big problem, but it only thrives due to the flawed and corrupt nature of capitalism.

Government still want to reward GP's for rationing healthcare

Before entering office David Cameron said the NHS was safe in his hands and promised to put an end to top-down reforms. Yet on entering office, his Government immediately embarked upon radical top-down reforms of the NHS, which no-one knew about and no-one voted for. 

The reforms contain fundamental conflicts of interest and put the future of the NHS at risk, prompting opposition and anger from the public as well as every professional healthcare group (e.g. the BMA, the Royal College of Nursing, Royal College of Surgeons ...).  

So Cameron said the Government would embark on a 'listening exercise", but in reality the Government listened very little (but talked a lot) and continued to quietly press ahead with GP commissioning (so there could deliberately be no turning back in this part of the plan)!

David Cameron has now given five pledges about reforming the NHS, but they are most noted for their omissions rather than what they include ... as there is no plan to stop GP's from profiteering from rationing healthcare ... i.e. the most blatant conflict of interest.  

GP's have shown themselves to be more than happy to profiteer from NHS changes in the past ... and many are looking to these reforms to provide the biggest opportunity yet ... e.g. by profiteering from bonuses (and shares in commissioning companies) for rationing healthcare to patients, as well as  being able to commission work to themselves or to companies they have interest in (e.g. shares, directorships).

David Cameron is making 'pledges' in many areas, but they are clearly not going to change the strategy of bribing GP's in order to ration healthcare - as this is the way that the Government plans to make £20bn of savings in the NHS ... and when you take out the additional profiteering from GP's, the real decrease in actual healthcare spending is going to be much more!




NB The Government are also still toying with imposing more competition from private health companies, and they're still looking to scrap their legal duty to provide the same level of healthcare to everyone wherever they live too! Which also go to show that the "listening exercise" was nothing of the sort, and that Cameron's 'pledges' are also not worth the paper they are written on ...

NHS reforms - a nice little earner for GP's

Exposed further - GPs could be earning around £140,000 extra each if they set up a private commissioning company – on top of their basic salary and bonuses. Have a read of the article below, written by Kieran Walshe (professor of health policy and management at Manchester Business School), and published in the Guardian:

GPs have always had an ambiguous position in the NHS. On the one hand, they are self-employed entrepreneurs, employing their own staff, owning their own premises and providing services for a fee, just like a solicitor or estate agent. Indeed, many GPs have diversified into owning private clinics, nursing homes and other businesses.

On the other hand, they are seen by patients as part of the NHS. They get a final salary pension just as NHS employees do, most of the services they provide are funded directly by primary care trusts through a nationally negotiated contract which GPs do not have to compete to get or keep, and once appointed it is almost impossible for PCTs to remove them. GPs have always been pretty hard-nosed about negotiating that contract with the Department of Health, and using it to maximise their income.

Will they be equally good at profiting from the NHS reforms? They could do so in four main ways:

• They will be paid to set up and run GP commissioning consortiums – a "management allowance" of about £55,000 per GP. This money could be spent on employing other people to do the work of the consortium, or they could pay their existing staff or themselves with this money.

• They will be paid a new "quality premium" for taking on commissioning, which the government says will be based on outcomes and efficiency. No one knows how much it will be, and GPs fear it will come out of existing income and will be intended to incentivise them to refer fewer patients to hospital.

• GPs could start to provide services which their own consortium commissions from them, often instead of patients having to go to an NHS trust or another provider. This already happens in services such as minor surgery but it could dramatically expand. For example, GPs who set up and own their own diagnostics centre could send patients there for ultrasounds and X-rays, instead of sending them to the local hospital.

• GPs in a consortium could set up a private company which they own, and then get the consortium to contract out the commissioning of healthcare to that company. If that company can make savings by spending less than it gets from the consortium, the surplus could then be distributed to the shareholders – the GPs – as profit. This is where the big money is: if they can save 5%, the surplus for redistribution would be about £140,000 per GP.

The NHS reforms envisage a much bigger role for the private sector in both commissioning and providing NHS-funded healthcare. Once NHS money flows out of public bodies such as PCTs and the new GP commissioning consortiums into the private sector, it's very hard to work out how it's being used and who is profiting from it. The Freedom of Information Act does not apply to private companies, the National Audit Office has no powers to require data from them, and past experience suggests that NHS bodies will claim that the details of contracts with private companies are commercially confidential. So we may never know who makes how much money from these reforms.

As highlighted yesterday, this is the real reason the BMA find themselves caught between two stools - between greedy GP's who are looking forward to profiteering ... and the concerned/honorable GP's (as well as hospital doctor's and consultants) who disagree with this and want to ensure that NHS money is channelled into caring for patients and not GP's bank balances (thereby avoiding any conflicts of interest).

However, as the BMA makes its stand, alongside the Liberal Democrats (who are part of the coalition government!) as well as the Royal College of Surgeons, the Royal College of Physicians and the Royal College of Nursing,  it appears David Cameron is looking to ignore them all and press ahead ('what was that about listening to the people David? ... oh yes! ... and what about listening to your own party Nick Clegg? ... oh yes! 

Entirely predictable, both of them ... we'll have to see whether a little bit of 'real people power' emerges now to stop them!




UPDATE: and just to show not all GP's are greedy, here's a post from one GP:

NiallB

16 March 2011 12:50PM

I am a GP.

I think this is a well argued article that explains why the profession is split in two by these reforms. One group of GPs 'the Pathfinders' are the entrepreneurs who will set up limited companies to cream money off the NHS. The others like me simply aren't interested, because we have enough work to do just seeing patients, and regard ourselves as already well paid for what we do.

Taxing times ... but not for everyone

Extracts of an article written by George Monbiot,  and published in the Guardian 8th February 2011.

In David Cameron we have a leader whose job is to quietly legitimise a semi-criminal, money-laundering economy.

“I would love to see tax reductions” David Cameron told an interviewer at the weekend, “but when you’re borrowing 11 per cent of your GDP, it’s not possible to make significant net tax cuts. It just isn’t.”

Oh no? Then how come he’s planning the biggest and crudest corporate tax cut in living memory?

If you’ve heard nothing of it, you’re in good company. The obscure adjustments the government is planning to the tax acts of 1988 and 2009 have been missed by almost everyone. They are, anyway, almost impossible to understand without expert help. But as soon as you grasp the implications, you realise that a kind of corporate coup d’etat is taking place. Like the dismantling of the NHS and the sale of public forests, no one voted for these measures, as they weren’t in the manifestos. While Cameron insists that he occupies the centre ground of British politics, that he shares our burdens and feels our pain, he has quietly been plotting with banks and businesses to engineer the greatest transfer of wealth from the poor and middle to the ultra-rich that this country has seen in a century. Here’s how it works.

At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil PLC pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match the corporate tax rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.

Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”: it is not available for smaller firms. The government says it expects “large financial services companies to make the greatest use of the exemption regime”. The main beneficiaries, in other words, will be the banks.

But that’s not the end of it. While big business will be exempt from tax on its foreign branch earnings, it will, amazingly, still be able to claim the expense of funding its foreign branches against tax it pays in the UK. No other country does this. The new measures will, as we already know, accompany a rapid reduction in the official rate of corporation tax: from 28% to 24% by 2014. This, a Treasury minister has boasted, will be the lowest rate “of any major Western economy”. By the time this government is done, we’ll be lucky if the banks and corporations pay anything at all. 

David Cameron said “what I want is tax revenue from the banks into the Exchequer, so we can help rebuild this economy.” He’s doing just the opposite.

These measures will drain not only wealth but also jobs from the UK. The new legislation will create a powerful incentive to shift business out of this country and into nations with lower corporate tax rates. Any UK business which doesn’t outsource its staff or funnel its earnings through a tax haven will find itself with an extra competitive disadvantage. The new rules also threaten to degrade the tax base everywhere, as companies with headquarters in other countries will demand similar measures from their own governments.

So how did this happen? You don’t have to look far to find out. Almost all the members of the seven committees the government set up “to provide strategic oversight of the development of corporate tax policy” are corporate executives. Among them are representatives of Vodafone, Tesco, BP, British American Tobacco and several of the major banks: HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and Barclays.

The world’s tax havens have not, as the OECD claims, been eliminated, but legitimised; with the City of London itself being a giant tax haven, which passes much of its business through its subsidiary havens in British dependencies, overseas territories and former colonies; its operations mesh with and are often indistinguishable from the laundering of the proceeds of crime; and the Corporation of the City of London effectively dictates to the government, while remaining exempt from democratic control. 

Tony Blair came to power after assuring the City of his benign intentions. He then deregulated it and cut its taxes. Cameron didn’t have to assure it of anything: his party exists to turn its demands into public policy. Our ministers are not public servants. They work for the people who fund their parties, run the banks and own the newspapers, insulating them from democratic challenge.

Our political system protects and enriches a fantastically-wealthy elite, much of whose money is, as a result of their interesting tax and transfer arrangements, effectively stolen from poorer countries and poorer citizens of their own countries. Ours is a semi-criminal money-laundering economy, legitimised by the pomp of the Lord Mayor’s show and multiple layers of defence in government. Politically irrelevant, economically invisible, the rest of us inhabit the margins of the system. Governments ensure that we are thrown enough scraps to keep us quiet, while the ultra-rich get on with the serious business of looting the global economy and crushing attempts to hold them to account.

And this government? It has learnt the lesson that Thatcher never grasped. If you want to turn this country into another Mexico, where the ruling elite wallows in unimaginable, state-facilitated wealth while the rest can go to hell, you don’t declare war on society, you don’t lambast single mothers or refuse to apologise for Bloody Sunday. You assuage, reassure, conciliate, emote. Then you shaft us.

Monbiot - another great web site uncovering the truth ... and more about how power is being misused ... for the benefit of the few (i.e. ultra-rich), and at the expense of everyone else.