May ‘locks in Brexit’ with multi-million national health fund boost (News)

However, May will risk a backlash from Conservative MPs by opening the door to increased borrowing and tax rises to fund the pledge. The Prime Minister is expected to say details of how the extra funding will be financed will not be announced until a future Budget – pledging to listen to views about how it should be achieved.

Hunt states that the funding will help “deliver the improvements people desperately want from their NHS” including better cancer survival rates and reduced waiting times for mental health treatment. “The extra funding will come in part from the ‘Brexit dividend’ – vast sums of money we will no longer send to the European Union after we have left – and the country will be asked to contribute a bit more for the NHS in a fair and balanced way,” a No 10 spokesman said last night.

Downing St said that the NHS “will receive an extra £600 million per week in cash terms compared to today” in a five-year funding settlement. The settlement would equate to an average increase of around 3.4 per cent per year over the next five years.

“Under our plan, by 2023-24, the NHS budget will increase compared to today by over £20 billion a year in real terms, which is approximately £600 million a week in cash terms,” the Downing St spokesman added. In return, the NHS will be expected to produce a plan, led by doctors, setting out how the money will deliver the Government’s “vision” for the health service and ensure value for money.

During the 2016 referendum campaign Brexiteers, including Boris Johnson, travelled around the country in a Vote Leave bus emblazoned with the slogan: “We send the EU £350 million a week, let’s fund our NHS instead.”

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The campaign was accused of “misleading” voters because the figure referred only to the UK’s gross annual contribution and did not take into account Britain’s rebate and other payments that come back from the EU.

But in January Johnson doubled down on the slogan, stating that the estimate was “grossly underestimated”.

The Foreign Secretary said the UK’s weekly gross contribution to the EU would in fact rise to £438 million by the end of a post-Brexit transition period in 2021, as he continued to pledge the NHS would be “top of the list” when the spare cash became available.

“The debate over Brexit can be divisive, but that famous campaign promise can now unite us all: the British public voted for £350 million a week for the NHS, and that – and more – is exactly what this government will deliver,” Hunt said. The announcement follows 11th-hour discussions between Downing Street, Hammond, Hunt and Simon Stevens, the chief executive of NHS England, over the figures.

Last week Stevens said a rise of between 3.5 and 4 per cent was required to ensure the NHS, which  has a £128 billion budget, could cope. Since 2008 average growth has been 1.4 per cent a year.  Hunt has been pushing for an annual increase of 4 per cent every year from next year.

Proposals under consideration for funding the pledge alongside the Brexit dividend are believed to include freezing the thresholds for the personal allowance, the rate at which people start paying income tax, and for the 40p rate from April 2020.

In the past the approach has been criticised as a “stealth tax” because freezing the threshold means that more people get dragged into the higher rate as earnings rise. It has been estimated that the measure could raise almost £4 billion by the end of this Parliament.

Meanwhile, in a sign of arguments likely to be made by Tory MPs, John Penrose, a senior backbencher, has said that Hammond should commit himself and future chancellors to only borrowing money for “long-term investments” in infrastructure, rather than day-to-day spending on areas such as the health service.

Penrose, a former Cabinet Office minister, urged Hammond to introduce a new “fiscal rule” to ensure “we only live within our means”.

Telegraph, London