Cameron's NHS spending pledge is worthless

The PM claims that spending will rise but the figures show that it will be frozen or even cut.

One of David Cameron's "five guarantees" on the NHS is that spending on the health service will rise "in real terms" over the course of this Parliament. In his speech on the NHS today, the PM boasted that there would be "£11.5 billion more in cash for the NHS in 2015 than in 2010". He added: "We are not cutting the NHS. In fact, we are spending more on it."

Cameron is referring to the fact that spending on the NHS, which currently stands at £102.9 bn, will rise to £114.4bn by 2014-15, a cash increase of £11.5bn. But what he ignores is that all of this increase will be swallowed up by inflation. The purchasing power of the NHS will be progressively reduced as the price of drugs and equipment continues to rise.

Once we take inflation into account, health spending will be frozen or even cut. As Professor John Appleby, chief economist at the King's Fund, writes in the latest edition of the British Medical Journal, "by 2014-15 the amount of money the NHS has to spend in real terms, its purchasing power, will have gone down by 0.9%." Thus, not only will Cameron fail to meet his flagship pledge to increase spending on the NHS "in real terms", he will fail to even protect it from the cuts.

Of course, George Osborne could announce an inflation-busting increase in health spending to ensure the government keeps its pledge (although that would mean even larger cuts elsewhere). But for now, it's simply dishonest of Cameron to claim that he is raising spending on the NHS. Without any new money, his "spending guarantee" is worthless.

George Eaton is political editor of the New Statesman.

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Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.