The promised £20bn is still nowhere near enoughby Anita Charlesworth / October 23, 2018 / Leave a comment
With the end of party conference season and in the midst of Brexit turmoil, the next big domestic event is the Budget on 29th October. But while he may not don Theresa May’s dancing shoes, it looks like Chancellor Philip Hammond may need a good pair of running shoes. For this budget, he will need to take lessons from the Red Queen who, in Through the Looking-Glass, tells Alice that the world keeps shifting so quickly under her feet that she has to keep running just to keep her position.
The political backdrop to the Budget is clear—the government needs good news and to deliver some tangible improvements on domestic policy. In her party conference speech earlier this month, the prime minister signalled an end to austerity and reiterated her commitment to provide an additional £20.5bn for the NHS.
This sets Hammond a huge challenge. The IFS suggests that the economy is around 2 per cent smaller today than expected before the 2016 referendum. That’s a hit of around £40bn to our national prosperity. Looking forward the outlook remains one of weak economic growth—perhaps 1.5 per cent next year and they expect investment to remain subdued until Brexit uncertainty is resolved. The IFS concludes that, “without much higher growth than forecast or substantial tax rises, ending austerity is not compatible with eliminating the deficit by the mid-2020s.” Ouch. Eliminating the deficit has been a keystone of Conservative ambition since 2010.
That the NHS is the focus makes clear political sense as it consistently tops the public’s worry list beyond Brexit. But transforming health into a good news story through the Autumn will be very hard. The government needs to run very fast if it’s not to lose ground.
The prime minister’s extra funding is a promise spread over the next five years. This might look like a classic case of “jam tomorrow” which won’t be enough if TV screens are full of pictures of a winter crisis. This is already the opposition’s narrative and, with warnings from NHS hospitals of even more severe challenges this winter than last, one that will have bite if services don’t improve. IPSOS Mori recently surveyed people in 28 countries and found that the British top the league table of countries worried that their health service is overstretched. They are right. Hospitals are…