A quick thread on a new note on NHS funding from @adamcorlett @GeorgeBangham and me: resolutionfoundation.org/publications/h…
First, public concern about the NHS is back to levels recorded in the early-2000s
First, public concern about the NHS is back to levels recorded in the early-2000s
That's come about because - even though health has been relatively protected since 2010 - spending has fallen as a share of GDP in recent years. An ageing population, chronic conditions and new treatments mean standing still isn't enough
Speculation is that the govt will provide a 70th birthday boost on 5 July, but how much? HMT is said to favour 2.5% a year (£13bn extra in 2022-23), whereas the Health Secretary wants ~4% (£23bn in 2022-23). So somewhere between the two probably...
Hard to see this being funded by further cuts to other services or welfare - we've already seen some massive budget reductions
We can expect some extra borrowing, with the Chancellor hinting in March that he would use some of his fiscal headroom come the Autumn. But v unlikely to want to do it all in this way. Which means some form of tax rise appears inevitable
An increase in National Insurance would be 'popular' among the public (4/5 say they're in favour as long as the funds go to the NHS). It's also progressive, and what worked in 2003. But...
..it's generationally unfair, with all of the funds coming from working age adults. And it's also v hard to see the govt winning a vote on this - with none of the opposition parties inclined to support
An income tax rise is progressive, raised more (£7.4bn for 1p rise) and doesn't have the generational problem. But it's less popular, and winning a parliamentary vote would again be tough (though helped by a LibDem manifesto pledge and by recent rises in Scotland)
Cancelling the Corporation Tax cut in April 2020 looks a bit more straightforward, and would raise £5.7bn. Labour and the LibDems have promised increases and the UK already has an internationally low rate, so there wouldn't be too much opposition
Wealth taxes also worth exploring. Clear there are no easy answers though. So govt should consult on options this summer then deliver a (belated) b'day present at the Autumn Budget that has been carefully assessed for progressivity, generational fairness & political practicality
Here's the briefing note in full resolutionfoundation.org/publications/h…
