Miliband makes his first major spending pledge: Labour won't cut the NHS

A Labour government would not consider "cutting the health service", says Miliband in his biggest post-2015 commitment.

Largely unnoticed by the media, Ed Miliband has made his first major spending commitment. Challenged by Nick Robinson on whether a Labour government would consider making cuts to the NHS, Miliband replied:

We're not going to be cutting the health service, I'm very clear about that. We will always be protecting the health service and will always make it a priority.

His decision to rule out cuts to the NHS, even at this early stage, is unsurprising. Polls show that it is the most popular spending area with voters and the above-average rate of inflation in the health service means it frequently requires real-terms rises just to stand still. With David Cameron and George Osborne making it clear that the Tories would continue to ring-fence the NHS after 2015, Labour has no intention of finding itself on the wrong side of this political divide. 

Miliband's pledge means that the Lib Dems are, once again, likely to go into the general election as the only party that would consider making cuts to health. Ahead of the 2015-16 Spending Review in June, Vince Cable has continued to argue that ring-fencing is not "a very sensible" long-term approach.

Ed Miliband said a Labour government would "always be protecting the health service". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: whatever you hear, don't forget - there is an alternative

The goverment's programme of cuts is a choice, not a certainty, says Jolyon Maugham.

Later today you will hear George Osborne say there is no alternative to his plan to slash a further £20bn from lean public services by 2020-21. He will also say that there is no alternative to £9bn cuts to tax credits, cuts that will hit the poorest hardest, cuts of thousands of pounds per annum to the incomes of millions of households.

But there is.

As I outlined here the Conservatives plan future tax cuts which benefit, disproportionately or exclusively, the wealthy. Suspending those future tax cuts for the wealthy would say, by 2020-21, £9.3bn per annum.

I also explained here that a mere 50 of our 1,156 tax reliefs cost us over £100bn per annum. We don't know how much the other 1,106 reliefs cost us - because Government doesn't monitor them. And we don't know what public benefit they deliver - because Government doesn't check.

What we do know, as I explained here, is that they disproportionately and regressively benefit the wealthy: an average of £190,400 per annum for the wealthiest.

And we know, too, that they include (amongst the more than 1,000 uncosted reliefs) the £1bn plus “Rights for Shares Scheme” - badged by the Chancellor as for workers but identified by a leading law firm as designed for the wealthiest.

Simply by asking a question that the Chancellor chooses to ignore - do these 1,156 reliefs deliver value for money - it is entirely possible that £10bn or more extra in taxes could be collected without any loss of  public benefit

To this £19bn, we might add the indiscriminate provision - both direct and indirect - of public money to wealthy pensioners.

Those above basic state pension age enjoy a tax subsidy of up to 12% on earned income.

Moreover, this Office for National Statistics data (see Table 18) reveals that the 10% of wealthiest retired households - some 714,000 households - have gross pre-tax and pre-benefit private income of on average £43,983. Yet still they enjoy average cash benefits from government of £11,500 per annum.

Means testing benefits to exclude that top 10 per cent of retired households would save £8.2bn per annum. And why, you might wonder aloud, should means testing be thought by the government appropriate for the working age population, yet a heresy for retired households?

Add in abolition of that unprincipled tax subsidy and you'll save even more. 

So there are alternatives. Clear alternatives. Good alternatives. Alternatives that enable those with the broadest shoulders to bear some share of the pain. Don't allow yourself to be persuaded otherwise.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.