Newspapers this morning are full of the announcement of more funding for the NHS, which is good, coupled with disbelief that ANY of the additional money will come from what Theresa May called the "Brexit dividend". There is a lot of suspicion that the figure of £384 million a week extra was chosen precisely because it's fractionally more than the red bus figure of £350 million. The Express even claims (HERE) the figure is £600 million which it gets to by assuming NHS spending between now and 2023 would not rise in line with inflation at all. There is no limit on how much the gullible can be gulled.
The Prime minister's mistake yesterday was to couple the increase with Brexit, something one might believe was suggested to her by Boris Johnson, who has struggled to get himself from under the bus for two years. She will face a lot of pressure to explain just how much of the "dividend" comes from Brexit and how much from taxation and borrowing. Paul Johnson, director of the highly respected Institute for Fiscal Studies says the government has already accepted the economy has taken a £15 billion a year hit from the vote and has also committed to match the EU funding for farming and regional development. As he says, "There is no Brexit dividend" - see this in The Metro report HERE.
Paul Johnson says payments to the EU will fall, but tax revenue will fall further and this is the nub of the problem.
Even the Express, buried in the article itself, says the full amount of money will not become available until after 2023 anyway.
But there are several other aspects that she will be forced to confront at some point. First, the increase is still below the long run average increase that the NHS has had in the past. At best it will only keep things as they are now and prevent matters getting materially worse. Secondly, the chancellor is committed to balancing the books by 2025 so almost certainly the extra money will have to come from higher taxation rather than borrowing. And finally, other cabinet ministers, at Defence and the Home Office are also desperately in need of more money and will be pressing for increased spending in their own departments.
It is all quite cynical and I note some people are questioning why the announcement is being made now. Is it to prevent Jeremy Hunt resigning? Or is it because there is some bad news coming down the track that the PM wants to offset?
The Dominic Cummings £350 million a week lie emblazoned on the bus is still haunting BoJo and the Conservative party after two years and I daresay it will do so for a very long time.
