Jeremy Hunt delivers a speech during his visit with David Cameron to the Evelina London Children's Hospital on July 5, 2013. Photograph: Getty Images.
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Jeremy Hunt to meet Frank Field to discuss NHS funding crisis

Health Secretary agrees to look at Labour MP's plan to raise National Insurance to fund higher spending. 

Today brings yet more evidence of the NHS funding crisis. As the Nuffield Trust's Into the Red report notes, 66 trusts are now in deficit and require hundreds of millions of emergency funding, and the service is running a total national deficit of £100m compared with a surplus of £383m last year. Of the 78 health leaders surveyed by the group, 47 per cent said it was quite (33 per cent) or very (14 per cent) unlikely that the NHS would remain free at the point of use in a decade's time. 

Without a real-terms increase in spending in the next parliament, the funding gap will stand at £30bn by 2021. Demographic pressures, the rising cost of technology and the growth in chronic conditions all mean that merely ring-fencing the service from cuts will not do. 

In my column in this week's magazine, I look at how Labour is grappling with this issue. The most notable proposal has come from Frank Field, who has argued for a 1 per cent rise in National Insurance, accompanied by the lifting of the floor on contributions and the removal of the ceiling. He told me: "It both deals with the health service and deals with the double Ed problem, which is: does anyone believe them on the fiscal side?"

The plan is partly modelled on Gordon Brown’s 1 per cent increase in NI in his 2002 Budget, a move that proved more popular than almost anyone expected. Miliband, who as a Treasury adviser helped to design the policy, later described this act of social-democratic statecraft as his proudest moment. But, as I write, there is little prospect of a sequel. Shadow cabinet ministers, including Ed Balls, believe that is untenable for the party to speak of a "cost-of-living crisis" and then to argue for a rise in taxation on low- and middle-income earners. "It would be kamikaze politics," one tells me.

If Labour is to promise a real-terms rise in NHS spending, it will need to impose further tax rises on high-earners, or cut even more deeply elsewhere. Miliband will need to speak what Nye Bevan called "the language of priorities" ("the religion of socialism"). 

Meanwhile, as Field looks elsewhere for support, I can reveal that Jeremy Hunt has agreed to meet him to discuss his funding plan. While there might be little prospect of the Tories going into the election advocating an increase in taxation (indeed, David Cameron and George Osborne are determined to make tax one of their main dividing lines with Labour), it is significant that the Health Secretary is prepared to engage with Field, one of the few in Westminster prepared to speak the hard truths about the fiscal challenges that await the next government.  

George Eaton is political editor of the New Statesman.

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The 5 things the Tories aren't telling you about their manifesto

Turns out the NHS is something you really have to pay for after all. 

When Theresa May launched the Conservative 2017 manifesto, she borrowed the most popular policies from across the political spectrum. Some anti-immigrant rhetoric? Some strong action on rip-off energy firms? The message is clear - you can have it all if you vote Tory.

But can you? The respected thinktank the Institute for Fiscal Studies has now been through the manifesto with a fine tooth comb, and it turns out there are some things the Tory manifesto just doesn't mention...

1. How budgeting works

They say: "a balanced budget by the middle of the next decade"

What they don't say: The Conservatives don't talk very much about new taxes or spending commitments in the manifesto. But the IFS argues that balancing the budget "would likely require more spending cuts or tax rises even beyond the end of the next parliament."

2. How this isn't the end of austerity

They say: "We will always be guided by what matters to the ordinary, working families of this nation."

What they don't say: The manifesto does not backtrack on existing planned cuts to working-age welfare benefits. According to the IFS, these cuts will "reduce the incomes of the lowest income working age households significantly – and by more than the cuts seen since 2010".

3. Why some policies don't make a difference

They say: "The Triple Lock has worked: it is now time to set pensions on an even course."

What they don't say: The argument behind scrapping the "triple lock" on pensions is that it provides an unneccessarily generous subsidy to pensioners (including superbly wealthy ones) at the expense of the taxpayer.

However, the IFS found that the Conservatives' proposed solution - a "double lock" which rises with earnings or inflation - will cost the taxpayer just as much over the coming Parliament. After all, Brexit has caused a drop in the value of sterling, which is now causing price inflation...

4. That healthcare can't be done cheap

They say: "The next Conservative government will give the NHS the resources it needs."

What they don't say: The £8bn more promised for the NHS over the next five years is a continuation of underinvestment in the NHS. The IFS says: "Conservative plans for NHS spending look very tight indeed and may well be undeliverable."

5. Cutting immigration costs us

They say: "We will therefore establish an immigration policy that allows us to reduce and control the number of people who come to Britain from the European Union, while still allowing us to attract the skilled workers our economy needs." 

What they don't say: The Office for Budget Responsibility has already calculated that lower immigration as a result of the Brexit vote could reduce tax revenues by £6bn a year in four years' time. The IFS calculates that getting net immigration down to the tens of thousands, as the Tories pledge, could double that loss.

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

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