NHS spending to rocket to 38p in every £1 of public service spending after cash injection in Hammond’s budget
- Philip Hammond revealed a huge tranche of spending boosts for public services
- Among them was a vast £20.5billion boost for the NHS over the coming years
- The huge increase will see 38 per cent of public spending go towards healthcare
NHS spending is set to skyrocket to 38p out of every £1 spent on public services by 2023 after Philip Hammond’s drastic Budget yesterday.
The remarkable increase in spending on the embattled health service will amount to a leap of 15p more for every pound spent compared to the year 2000.
However, jubilation at the announcement was tempered by a warning from the Institute for Fiscal Studies, which claimed higher taxes would be needed to keep up with rising demand for healthcare.
After Hammond’s Budget ‘to end austerity’ NHS spending will increase to 38 per cent in 2023 compared to 23 per cent in 2000
Hammond announced an historic package of funding boosts yesterday for public services including the NHS
IFS boss Paul Johnson called the funding increase ‘a bit of a gamble’ and said it may also lead to greater clamour for reform of the NHS in the long-term.
The IFS also said it may not be possible for Hammond to achieve the income tax breaks he promised for next year if uncertainty surrounding the Brexit deal continues.
Mr Hammond claimed in his Commons speech on Monday that the giveaways were possible due to the ‘tough decisions’ the government had made over the past eight years – which had brought better growth forecasts and lower borrowing.
‘Their hard work is finally paying off and the era of austerity is finally coming to an end,’ he insisted.
But 24 hours after his Budget it emerged the Chancellor plans to snatch back half of the £730 tax break handed to millions of workers by increasing national insurance contributions.
The Chancellor also said he would be handing an income tax break of approximately £730 to millions of workers
Small print published alongside the Budget on Tuesday showed that the upper earnings limit for National Insurance contributions will also be increased to the same £50,000 level.
The change, which was not mentioned in Mr Hammond’s Commons statement, will mean that higher earners will pay £365 extra in NI contributions, wiping out half of their £730 windfall.
Experts had feared Mr Hammond would be forced to renege on his promise to increase income tax thresholds in a bid to cover the cost of the £20billion funding pledge to the NHS.
But speaking later on BBC Radio 4’s Today programme, Mr Hammond said: ‘When you make a promise to the electorate and they elect you then you have an obligation to deliver on that promise.’