David Cameron and George Osborne have long rejected calls from figures such as Vince Cable and Liam Fox to end the protection of health spending in order to limit cuts elsewhere. But the NHS ring-fence is looking less secure today. Ahead of June’s Spending Review, the Telegraph reports that Philip Hammond is in talks with the Treasury about transferring up to £500m from the health and schools budgets to reduce the expected cuts to defence. The Defence Secretary, you’ll recall, has previously publicly demanded that welfare is cut again to protect the MoD. But with the Lib Dems vetoing any further cuts to welfare (bar those to pensioner benefits, which David Cameron has pledged to protect), Hammond has been forced to look elsewhere.
Cameron has already demonstrated his willingess to raid other departments’ budgets to fund defence by suggesting that aid spending could be used to meet the cost of peacekeeping and other defence-related projects. It’s thought that the government would justify any decision to divert resources from health and education to defence by pointing to the hundreds of millions of pounds a year the MoD spends on health care for armed forces personnel and the education of their children. But while the move will prove popular with Tory MPs, who are furious that defence is being cut by 7.5 per cent, while aid is being increased by 37 per cent, it is likely to be judged less favourably by the public.
As a ComRes/ITV News poll published in February showed, health and education are the two most popular spending areas, with defence trailing in sixth place (behind police and law enforcement, welfare and transport). It was partly for this reason that Cameron and Osborne chose to ring-fence the NHS and schools budgets. At last week’s PMQs, Cameron made much of his commitment to protect health spending, contrasting it with Labour’s decision not to pledge to do so before the 2010 election. “The right hon. Gentleman’s answer is to cut NHS spending, whereas we are investing in it,” he declared. A decision to now do otherwise would offer Labour an easy political hit.
It is also doubtful whether the NHS, which is already required to make unprecedented efficiency savings of £20bn over four years, should be cut for the purpose of reducing cuts to defence. The above-average levels of inflation in the health service mean that it requires real-term increases in spending just to stand still. But under pressure from his recalcitrant backbenchers and the National Union of Ministers, Cameron may yet give away.