UK Politics

Extra NHS Spending: Where's the Money Coming From?

24 Jun 2018 at 09:34

I’m not a great fan of unfunded spending promises. I am, after all a fiscal conservative. So, I had thought, were leading members of the government. The chancellor likes to remind us of his fiscal rectitude so Christ alone knows what Jeremy Hunt has on him. Somehow, he was persuaded to go along with a £20 billion promise for the NHS. Now, imagine this scenario. Imagine Jeremy Corbyn had told us he wanted to spend £20 billion on something but wouldn’t tell us how he would fund it for another five months. We’d laugh in his face and utter inanities about a magic money tree.

Secondly, what about the timing of this announcement? Why do it on 16/17 June when the 70th birthday of the NHS isn’t until the beginning of July? Was it a diversionary tactic to take the Sunday papers’ attention away from the Brexit meaningful vote amendment? Surely things hadn’t got that bad?

Thirdly, since when did the Health Service ever get better just by throwing money at it? Admittedly the government has asked Simon Stephens for a ten year plan, but he’ll no doubt say he needs even more money. Given the failures of the NHS under his stewardship I’d rather someone else was in charge of producing this plan. Here’s a radical idea. How about an actual politician taking responsibility for this plan rather than an official? I know the modern trend is to sub-contract this sort of things to officials – look at what Theresa May has done with the Brexit negotiations. In theory David Davis is in charge, but you could be forgiven for thinking that Olly Robbins was. Even now.

The whole NHS announcement was slightly dominated by the prime minister’s insistence that it will be funded in part by a Brexit dividend. It is true that there will indeed be a Brexit dividend, but that’s not going to become apparent until after the transition period, and let’s face it, the £9-10 billion will have many competing bids. What this also means is that the chancellor has been able to rather over-gleefully inform his cabinet colleagues that there is no spare money for anything else. Nothing for education. Nothing for defence. Nothing for anyone.

The next few months are going to be dominated by speculation about how the chancellor will raise the extra money that has been promised to the NHS. A blanket income tax rise is out of the question. I suspect it is the better off that are going to cop it again. The most likely measure is to slam more on national insurance. It will be employers who end up paying the largest share, mark my words. In addition I suspect the upper earnings limit on national insurance will be extended or abolished. In the 1970s and 1980s we used to talk about ‘incentives’. Some people in government need reminding about the true meaning of that word.

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