In Britain, Entrusting Healthcare to the Loan Sharks Who Ate Us
The bankers’ crisis cut Britain deeply, in the form of a bailout that peaked at £1.16 trillion, or $1.84 trillion, according to the National Audit Office. Now, David Cameron's Conservative government is busy selling off national services in chunks to private corporations – coincidentally, to those same investment bankers who created the mess to begin with.
Privatization and cuts threaten services – including public healthcare, education and local services – as the drive for profits against a background of cutbacks means drops in provisions. Worst still, the corporations that will receive massive contracts with British taxpayers’ money are financially unstable: they share track records of financial irregularities, many are subsidiaries of tax-avoiding multinationals, and included are even tax haven-based investment and private equity groups.
In short, Britain is putting its public services, the vital safety net that we get in return for our taxes, in the hands of the least trustworthy and transparent investors imaginable. These are the individuals, remember, who gambled money into an over-inflated property bubble that burst and turned their crisis of speculation into a human crisis. Now, after being bitten by a great loan shark of financial banking, it seems the same shark is going to be entrusted to care for the sick, look after our children and run our local swimming pools.
Getting out the water, instead, seems a sensible idea now.
The banking crisis proved that when banks that are “too big to fail” crash, human crisis ensues - especially in terms of cuts to vital healthcare and welfare spending, which keep people above the poverty line. The cuts alone will reduce British healthcare spending by 8% over the next three years, according to the Financial Times. While there are already 6,000 fewer nurses since the Conservatives took the lead role in government, education spending has also dropped the largest amount in any four-year period since the 1950s, reports the Institute for Fiscal Studies.
Comparatively though, the period of privatization ahead looks even worse. The government has recently agreed to sell £262 million worth of the National Health Service to private firms. It appears now that Peterborough Hospital will be the second hospital to be completely privatized, with many more potentially to follow once the barriers to private takeovers are lifted over the next two years.
Circle Healthcare’s takeover of hospital services shows a particular dire truth about what happens under the private sector. According to the BBC, in its first six months in charge of the first NHS privatized hospital, Hinchingbrooke in Cambridgeshire, Circle Healthcare is already running at double the expected loss and is facing further financial difficulties.
And who owns Circle Healthcare? Corporations and investment funds registered in the British Virgin Islands, Jersey and the Cayman Islands in an arrangement that allows investors to avoid tax on their shares. The Guardian has reported how investments by these companies have kept Circle afloat - and that if those investments were withdrawn, the company would not be financially viable. Circle has attracted about £120 million from investment venture capital including Odey European, Lansdowne Partners, Balderton and Bluecrest.
To dig a bit deeper, so you know just who is in charge of funding your new health service: Odey European is a hedge fund owned by Crispin Odey, which made great gains by betting that the banks would collapse in 2008. Public records suggest Odey paid himself £91 million from 2008 to 2012. Quoting Mr Odey himself, “When the crash happened, we started really making money,” which happened through betting against stocks in British bank HBOS and their shares in sub primes. He also short sold stocks in the bank Bradford and Bingley and against Irish banks, adding to their financial crisis.
Further, Lansdowne Partners made £100 million by betting that the bailed-out bank Northern Rock would collapse, according to figures from the Daily Mail. Reuters meanwhile has written about how the hedge fund made millions betting against UK banks, especially Lloyds TSB. All of this helped create the immense bailout situation; it is not a hard route of logic to say Landsdowne made millions betting against the British taxpayer using the banks as a mechanism or leverage.
As for Bluecrest - which, as its website states, makes money betting on “currency and interest rate movements” - the Mail Online detailed how the company reaped huge profits from the fall in British currency - a factor that catalyzed the financial crisis, on the back of its short selling of sub primes.
Within the shadowy world of private healthcare providers, further investigations are needed to see if Circle is even one of the worst companies out there. At the least, its weak position and reliance on corrosive investors suggests another crisis is on the way - the crisis of our actual, physical health, which has been entrusted to a gang of gamblers and financial speculators.
Is it a suicidal impulse, to put your existential well-being in the hands of those whose only motive is to profit, not to see you well? Because that is the sick nightmare Britain today seems unable to wake up from.