After shock NHS boost, there’s officially no money left for schools, defence or the police

Chancellor Philip Hammond has told cabinet members not to expect any extra cash for other sectors in the wake of £20bn health pledge.

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I’m afraid there is no money left: that’s the note that Liam Byrne famously left for his successor as chief secretary to the Treasury, a job that Philip Hammond had expected to receive in a Conservative government. Instead, there was a coalition and the note went to David Laws, with devastating consequences. 

But the Royal Mail always delivers eventually and Hammond finally seems to have got the memo: there is no money left is the message he gave to Conservative cabinet ministers yesterday. “There's no more money, Hammond tells Cabinet” is the Times’ does-what-it-says-on-the-tin splash. 

Hammond told ministers that while the spending taps might be coming on for health, there would be no such largesse on the way for schools, defence or the police, to name just three areas that are feeling the strain of close to a decade of spending cuts. 

The NHS is a special case for a variety of reasons: it occupies a special place in the hearts of voters: when you ask people unprompted what makes them proud to be British, “the NHS” is generally number one in polls and focus groups. The issue is the definition of a home fixture for Labour, who voters trust to tend for it better than the Conservatives. All else being equal, crisis in the NHS is good for Labour and bad for the Conservatives.

Then there's the Brexit angle: putting more money into the NHS is seen as vital to securing the longterm viability of Brexit as a political project, which means that Leave ultras, who are not on the whole a fan of borrowing or tax rises, have to support it. 

It comes back to Hammond's peculiar political isolation: he is essentially the only politician in the cabinet who wants traditional right-wing economics and a close relationship with the European Union. (In a sense, he's the last real Thatcherite.) 

Whenever the interests of the cabinet's high spenders and the Brexiteers align, Hammond will have to give way. But they don't align all that often. School cuts, the source of no small measure of electoral discomfort in 2017, may live to bite the Conservatives again at the next election. 

Stephen Bush is political editor of the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics. He also co-hosts the New Statesman podcast.

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