The coming NHS spending announcement is the strangely-conceived love child of Jeremy Hunt and Dominic Cummings. From Hunt comes a new outspokenness – a product of his accumulated experience as Health Secretary, Theresa May’s loss of a Commons majority, and his consequent unsackability. He wants a ten year funding plan for the service. From Cummings comes his focus groups – and the stress they placed, pre-EU referendum, on more money for the NHS. In Government, Boris Johnson has pressed for that famous £350 million a week to be found for the service, almost as though this were a Vote Leave government, which for better or worse it is not. Hunt, the former Remainer, and Johnson, the committed Leaver, are united in wanting more public money. Theresa May has been unable to hold out against their lobbying, plus more from a mass of the usual suspects, as the NHS’s 70th anniversary approaches in July.
How much more cash? One account has it that Hunt wants three per cent more a year. The Health Foundation and the Institute of Fiscal Studies are calling for four per cent. That’s roughly the figure that Simon Stevens, whose influence on the politics of healthcare is greater even than Hunt’s, requires for his five year plan. The background is familiar: an ageing population and rising health costs. How to pay for it? The Health Secretary has cited economic growth and tax rises. Others seem to have more confidence in the latter than the former. Nick Boles wants National Insurance to become National Health Insurance. Nick Macpherson also wants an earmarked health tax. He’s a former Treasury Permanent Secretary, and his call is a raspberry to the department’s orthodoxy. David Willetts, urging his own menu of rises, says that “the age of tax cuts is over”. Everywhere you look it’s tax, tax, tax.
Certainly, it is impossible to see how health and social care costs can be met without those who use them paying more. But Hunt is not alone in wanting more money for his department. Gavin Williamson is calling for more resources for defence: as coincidence would have it, an annual three per cent rise in the defence budget would cost roughly the same as Cummings’ £350 a week. Only yesterday, Sajid Javid threw his newly-increased political weight behind more resources for the police. Where they go, others will follow. Local authorities are knocking on James Brokenshire’s door. Teachers campaigning for more money for schools paid a part in last summer’s Conservative election reverse. The Treasury is apparently holding out for an NHS rise of two per cent only. Which brings us to the politics of spending as well as the finances.
George Osborne’s long squeeze has paid off. The deficit is now at its lowest as a proportion of GDP for some 15 years. In his Budget, Philip Hammond promised “a balanced approach” between the competing claims of reducing debt, cutting tax and raising spending. A flexible approach is inevitable given the exigencies of Brexit. But adaptability is one thing and recklessness quite another. There is a lotus-eating mood among some Tory MPs. Spooked by Jeremy Corbyn’s general election revival, and under pressure in their constituencies from the lobbies, there is a sense among some that, after years of relative restraint, the Chancellor should turn on the spending taps. A re-Instagrammed Liz Truss is making the case for keeping the roof maintained while the sun is still out. That is part of the point of FREER.
Sajid Javid’s instincts are for prudence, for all yesterday’s warmth for the police. So are David Gauke’s. But, with a departmental spending review looming next year, it is unclear how many of their Cabinet colleagues take the same view. Nor is the Chancellor operating from a position of strength. It was Greg Clark, not Hammond, who recently fronted the case for the customs partnership on TV, and the Chancellor’s absence from the public debate suggests that the scheme’s supporters believe that his weighing-in would be counter-productive. The Prime Minister distanced herself from Osborne’s approach even before last summer’s electoral reverse. Her launch speech for the Conservative leadership spoke of “economic reform”. Her first Party Conference speech challenged Mark Carney’s record on monetary policy. He slapped her down and no more was heard of it.
One outcome is certain. Voters complain when they think the NHS is starved of funds – and of cash being wasted and of the service being ripped off – but their gratitude for new money is strictly limited. Much of any further increase will vanish into the system. Anger may be staved off but gratitude will be in short supply. Meanwhile, Britain cannot be taxed into prosperity. Any new rises must be balanced against consequent reductions elsewhere. How – given the pressures we describe? And from where? The Conservative Party hasn’t thought afresh about the challenge since its opposition days, the best part of ten years ago. As Steve Moore pointed out on this site recently, part of the rationale of David Cameron’s Big Society was that it would come with a Jean Chrétien-type public spending review – and more reform. Those new Tory think-tanks and the Treasury should be dusting down the Party’s recent history.