There are a few squares to circle when it comes to how Labour negotiates the future direction of health policy for the National Policy Forum later this year.

One of them will have to be Labour’s future direction on “competition”. The basic knub of it is that people or entities which are competing will end up performing better, however that this is measured, to the benefit of the end user (called ‘customer’ traditionally in business or ‘person’ or ‘patient’ in healthcare.)

Ideologically, competition is associated with the neoliberal approach, where market forces will ultimately equilibrate to the benefit of the population. This has been likened to a Darwinian ‘survival of the fitness’.

However, the analogy is not entirely useless. In such a construct, it is perfectly possible that certain living beings become extinct. There may be no love lost over an ancient reptile no longer contributing its DNA to the animal race, but there could be a problem if a NHS unit for a very rare disease becomes financially unviable and goes extinct.

So Labour does have a slight problem on its hands. People disagree on the extent to which the section 75 Health and Social Care Act, which secured competitive tendering as the default option for commissioning NHS contracts (mainly to the private sector), was a a natural extension of the market philosophy which had occurred under the competition and co-operation facility of Labour.

People generally agree that the original arguments about quality and competition in the NHS were extremely badly argued with hindsight, in promoting “the market”. On the whole, members of the general public agree that there might be a rôle for competition in driving up standards in cleanliness of surgeries, such that you might prefer to be a patient of a particular surgery, while trusting a Doctor to be driven by professional standards not by profit.

The idea of the NHS logo becoming a kitemark for private providers long pre-existed this Government, and was alive and well under the previous Labour government. On the other hand, Andy Burnham MP has emphatically pledged that Labour will roll back the market when it comes into government in May 2015.

The repeal of the Health and Social Care Act (2012) is a big thumbs down to its three main planks of policy. One is definitely ‘unfinished business’, as anyone following the arrangements for Trust Special Administrators will see in the insolvency regimes. The other two are intrinsically the full entrenchment of the market through section 75, and its regulation through enhanced powers for an economic regulator called Monitor.

So can it be that Labour per se objects to competition? Historically, this cannot be the case.

Labour wishes to promote collaboration, which is in keeping with socialistic principles of solidarity and co-operation. However, two major areas of criticism emerge from many stakeholders over competition especially from the Unions, who represent many hardworking Doctors and nurses inter alia.

Firstly, the focus of the attack seems to be on corporates rather than SMEs or social enterprises. Indeed, markets tend to break down when large corporates collude in legal price behaviour meaning the end user does not benefit. This has contributed to a ‘cost of living crisis’ in energy and rail fares.

The market especially breaks down when specific corporates or charities collude with the State, producing a near monopolistic effect. This historically has been more likely the greater their size. This effect can be particularly detrimental when this impacts on policy, some of which is best left to non-market forces like subject experts or professionals.

The fundamental problem, if you apply Prof Michael Porter’s influential theory of competition from Harvard, is that smaller sized companies experience formidable barriers to entering the market. For example, they cannot compete on the basis of marketing spend or resources for investment. All too easily they can go out of business – hence the complete banality of claiming to have ‘an equal playing field’. A titchy SEO simply cannot compete with a large multi-national corporate especially if that corporate is already skilled at doing slick commercial pitches.

This is significant in considering the overall shape of how Labour policy is shaping up for 2015. It’s not a general attack on business that Ed Miliband has in mind, but an attack on those large corporates who are abusing their power.

Secondly, large companies under law have a duty for their directors to promote profitability with due regard to their environment, but profitability is generally considered to be dominant by legal experts in this jurisdiction. Social enterprises form an umbrella of different entities, which do not necessarily have to have this duty (for example in talking about a surplus not profit).

There can of course be bad charities or bad other entities in the third sector, just as there can be bad private or public limited companies. Part of the challenge for Labour is to think about how it can reconcile the views of Andy Burnham, who wishes to roll back the market, and Alan Milburn who sees competition as a means of promoting progress. It is crucial to remember that Alan Milburn is not a member of the Shadow Health team: that team is led by Andy Burnham MP.

Hedge funds or private equity will nor necessarily wish to confine their investments to large corporates anyway. Smaller companies may be more nimble and more likely to produce a return on investment, and, should Labour wish to find a place for such activity in the NHS somewhere, Burnham and Milburn might see a way in which their profits can be ploughed back into the general health economy of the NHS. Whilst the NHS has been demonised by lazy journalists and politicians as being ‘monolithic’, with the same old canards put to out to trot (or whatever the phrase is), the NHS can in business management terms benefit from its economies of scale, making it more competitive.

So it might be that Alan Milburn and Andy Burnham are able to define the parameters in which there is a place for competition in the NHS. It could be that many large corporates do not wish to collude in an oligopolistic way at all, and act responsibly in the NHS.

However, Andy Burnham, in promoting his “NHS preferred provider” can provide a way in which social enterprises can legitimately contribute to competition, and even have some input from the multinational corporates in contracts under “the prime contractor model.” This of course can be done within the parameters of maintaining a NHS which is comprehensive, free at the point of need, in as much as some rationing has been taking place, but to avoid a rampant market with powerful private providers cherrypicking profitable work.

But the point is that the positions of Milburn and Burnham are not complete polar opposites.  Whilst loyalties to the two individuals can be quite fierce, they both occupy a very senior of level of influence in the Labour Party, and will have a massive say on the future direction of the English NHS. But it is yet again significant to remember that Alan Milburn is not a member of the Shadow Health team: that team is led by Andy Burnham MP.