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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Why Theresa May won't exclude students from the net migration target

The Prime Minister believes the public would view the move as "a fix". 

In a letter to David Cameron shortly after the last general election, Philip Hammond demanded that students be excluded from the net migration target. The then foreign secretary, who was backed by George Osborne and Sajid Javid, wrote: "From a foreign policy point of view, Britain's role as a world class destination for international students is a highly significant element of our soft power offer. It's an issue that's consistently raised with me by our foreign counterparts." Universities and businesses have long argued that it is economically harmful to limit student numbers. But David Cameron, supported by Theresa May, refused to relent. 

Appearing before the Treasury select committee yesterday, Hammond reignited the issue. "As we approach the challenge of getting net migration figures down, it is in my view essential that we look at how we do this in a way that protects the vital interests of our economy," he said. He added that "It's not whether politicians think one thing or another, it's what the public believe and I think it would be useful to explore that quesrtion." A YouGov poll published earlier this year found that 57 per cent of the public support excluding students from the "tens of thousands" target.

Amber Rudd, the Home Secretary, has also pressured May to do so. But the Prime Minister not only rejected the proposal - she demanded a stricter regime. Rudd later announced in her conference speech that there would be "tougher rules for students on lower quality courses". 

The economic case for reform is that students aid growth. The political case is that it would make the net migration target (which has been missed for six years) easier to meet (long-term immigration for study was 164,000 in the most recent period). But in May's view, excluding students from the target would be regarded by the public as a "fix" and would harm the drive to reduce numbers. If an exemption is made for one group, others will inevitably demand similar treatment. 

Universities complain that their lobbying power has been reduced by the decision to transfer ministerial responsibility from the business department to education. Bill Rammell, the former higher education minister and the vice-chancellor of Bedfordshire, said in July: “We shouldn’t assume that Theresa May as prime minister will have the same restrictive view on overseas students that Theresa May the home secretary had”. Some Tory MPs hoped that the net migration target would be abolished altogether in a "Nixon goes to China" moment.

But rather than retreating, May has doubled-down. The Prime Minister regards permanently reduced migration as essential to her vision of a more ordered society. She believes the economic benefits of high immigration are both too negligible and too narrow. 

Her ambition is a forbidding one. Net migration has not been in the "tens of thousands" since 1997: when the EU had just 15 member states and the term "BRICS" had not even been coined. But as prime minister, May is determined to achieve what she could not as home secretary. 

George Eaton is political editor of the New Statesman.