Jeremy Hunt admits NHS spending boost would mean tax rise

Jeremy Hunt

Health secretary says speculation about a £4bn-a-year funding increase is premature

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Jeremy Hunt backs 10-year funding deals for NHS – video

Health secretary Jeremy Hunt has conceded he believes taxes may have to rise to pay for a boost in NHS spending.

Appearing on ITV’s Peston on Sunday, Hunt said speculation in the Sunday Times about a £4bn-a-year funding boost to coincide with the NHS’s 70th birthday was premature.

But the health secretary, who resisted Theresa May’s plan to move him into another post in January, said it was time to scrap what he said had been a “feast or famine” approach to funding the NHS.

“There’s no doubt that NHS staff right now are working unbelievably hard and they need to have some hope for the future,” he said. “But I think their real concern is this rather crazy way we have been funding the NHS over the last 20 years, which has really been feast or famine.”

Asked about where the extra resources would come from, he said: “We are a taxpayer-funded system, so in the end if we are going to get more resources into the NHS and social care system, it will have to come through the tax system and also through growth in the economy.”

A growing number of Conservative MPs have been raising the issue of the underfunding of healthcare – particularly the social care system – and some have suggested a dedicated “NHS tax”.

The foreign secretary, Boris Johnson, has been among those calling for an increase in NHS funding, raising it at cabinet level in a well-briefed intervention in January.

The Vote Leave campaign in the 2016 referendum suggested that by allowing Britain to stop paying into the EU budget, Brexit could free up an extra £350m a week to spend on the NHS.

Q&A What was wrong with the claim that the UK sends the EU £350m a week?

The claim that Britain “sends the EU £350m a week” is wrong because:

The rebate negotiated by Margaret Thatcher is removed before anything is paid ​​to Brussels. In 2014, this meant Britain actually “sent” £276m a week to Brussels; in 2016, the figure was £252m.
Slightly less than half that sum – the money that Britain does send to the EU – either comes back to the UK to be spent mainly on agriculture, regional aid, research and community projects, or gets counted towards ​the country’s international aid target.

Regardless of how much the UK “saves” by leaving the EU, the claim that a future government would be able to spend it on the NHS is highly misleading because:

It assumes the government would choose to spend on the NHS the money it currently gets back from the EU (£115m a week in 2014), thus cutting f​unding for​ agriculture, regional development and research by that amount.

It assumes​ the UK economy will not be adversely affected by Brexit, which many economists doubt.

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Calculations by the independent Office for Budget Responsibility (OBR) published alongside the spring statement this month suggested it was impossible as yet to estimate the size of any such Brexit dividend.

In the short term, much of the money saved by not contributing to the EU budget has already been pledged elsewhere – for example on maintaining current levels of subsidies to farmers.

“The government has not yet fully articulated its intentions in this area and, even if it had, the precise post-Brexit outcome remains subject to negotiation,” the OBR said.

Hunt reiterated his support for longer-term funding settlements for the NHS, saying a 10-year plan could allow the government to negotiate cheaper prices with drugs companies by striking longer-term deals, and also to pay for new IT systems.

“There’s lot of things that you could do that could fundamentally improve the efficiency of the system. What the public want to know is, yes, I understand the case that the NHS needs more money, I’d like to see that money going in – but I want to know that every pound of that money is being spent wisely.”

The chancellor, Philip Hammond, has made the funding available for the NHS pay deal struck last week with nurses, midwives and other staff – paid for partly from Treasury reserves. But in his spring statement, he stressed he had already injected more cash into social care.

A comprehensive spending review, setting out plans across all departments three years ahead is due next summer, with the overall spending total likely to be announced in Hammond’s autumn budget.

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