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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Heathrow decision: 6 things we learnt about the third runway plans

Affected homeowners will get 25 per cent extra for their homes. 

After years of ferocious campaigning by both Heathrow and Gatwick to be the site of a new airport runway, Heathrow has triumphed. The government has accepted the recommendations of the Airports Commission and backed a third runway at Heathrow.

Confirming the decision, the Transport secretary Chris Grayling said: “The decisions taken earlier today are long overdue but will serve this country for generations to come."

So what happens now? Here is what we learnt:

1. It’ll be a while

Grayling said the draft policy statement will be published early in 2017. There will then be a full public consultation, before MPs get a chance to debate the details and vote on the proposals.

Only after that, will Heathrow be allowed to submit a planning application for the third runway.

2. Affected homeowners get a bung

Building a third runway will require the destruction of local homes, and Grayling said these homeowners can expect to be paid 25 per cent above the market rate. All associated costs, like stamp duty and legal fees, will be covered. 

3. So will the local communities

The government is promising £700m for insulating homes against noise, and it is floating the idea of a Community Compensation Fund that would make a further £750m available to local communities, although the details will be confirmed through the planning process. 

4. No flying at night

The government is demanding that flights are banned for six and a half hours a night to give locals some peace. Heathrow will also be expected to continue to give local residents a timetable of aircraft noise.

5. Air quality matters

Heathrow’s successful proposal included an ultra-low emissions zone for all airport vehicles by 2025. The airport can only get planning approval if it can meet air quality legal requirements. 

6. There will be a by-election

Zac Goldsmith, the MP for Richmond Park, is to resign in protest at the decision, and is expected to run again as an independent candidate. Speaking in the Commons, he warned that the decision to choose Heathrow was full of legal complexity and "will be a millstone around the government's neck". 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.