Boris Johnson will today try to draw a line under his controversial referendum pledge of a Brexit boost for the NHS by announcing an emergency £1.8 billion cash injection to the Health Service.
The Prime Minister, who vowed to spend an extra £350 million a week on the NHS as a post-Brexit dividend, says the extra money will go on frontline services and cutting-edge equipment, with the money concentrated on upgrades to 20 hospitals.
Last night, Mr Johnson praised the astonishing achievements of the Health Service, but noted the pressures facing patients. He said: ‘Which is why I am so determined to deliver on the promises of that 2016 referendum campaign: not just to honour the will of the people, but to increase the cash available for this amazing national institution.
‘It is thanks to this country’s strong economic performance that we are able to announce £1.8 billion more for the NHS to buy vital new kit and confirm new upgrades for 20 hospitals across the country.’
Boris Johnson will today try to draw a line under his controversial referendum pledge of a Brexit boost for the NHS by announcing an emergency £1.8 billion cash injection to the Health Service. While campaigning for leave in the 2016, Johnson vowed to spend an extra £350 million a week on the NHS as a post-Brexit dividend
Mr Johnson also said he was starting work immediately on plans to tackle the injustice of social care, a problem ‘that has been shirked for decades’.
The spending pledge is the latest – and most symbolic – example so far of Mr Johnson turning on the spending taps to try to swing public opinion behind his Brexit strategy and soften up voters for a potential snap General Election.
The £350 million figure, emblazoned on the side of a bus, was the idea of Vote Leave supremo Dominic Cummings, who is now installed in Downing Street as Mr Johnson’s No 10 enforcer.
It became the totemic issue of the 2016 campaign, with Remain supporters accusing Mr Johnson of ‘creative accounting’.
One of Theresa May’s last acts as Prime Minister was to announce a commitment to give the NHS an additional £20 billion by 2023, with £7.3 billion extra coming this year and £11 billion in 2020.
The £350 million figure, emblazoned on the side of a bus, was the idea of Vote Leave supremo Dominic Cummings, who is now installed in Downing Street as Mr Johnson’s No 10 enforcer
Mr Johnson’s NHS boost, which follows talks with Chancellor Sajid Javid and Health Secretary Matt Hancock during his first ten days in Downing Street, equates to an additional one-off capital spend of £1 billion for infrastructure projects and £850 million for hospital upgrades to wards and dilapidated buildings, all of which will be made available immediately.
It comes after Mr Cummings was critical of the previous Government’s failure to meet the £350 million bus pledge – which equates to just more than £18 billion a year – allowing, he argued, Labour to ‘own’ the NHS as an issue. NHS managers have warned hospitals are so short of capital that some represent a hazard to patients and staff.
The backlog of essential maintenance work is estimated at £6 billion, while basic services are under critical strain from the costs imposed by an ageing population.
A No 10 source said that the Prime Minister, who is expected to visit a hospital tomorrow to publicise the new funding and name the 20 sites set to be upgraded, had ‘been clear since day one that the NHS is a top priority’. The chosen hospitals are understood to be disproportionately based in deprived areas which voted Leave in 2016 – and which senior Tories will hope to seize from a Labour Party divided over its Brexit policy.
Mr Johnson’s early days in power have been dominated by his domestic policy priorities – displaying his commitment to keeping the Union together, cracking down on immigration and now the NHS, all of which are likely to be central to the party’s Election campaign.
Michael Gove, the Minister in charge of No Deal preparations, is also poised to announce spending plans to cushion the economy from the impact of No Deal.
Project Kingfisher – the codename for the Treasury’s secret bailout fund – is likely to get the green light from Mr Gove, sources have said.
It includes a short-term fiscal stimulus package to prop up manufacturing and industry, with Ministers having already drawn up top-secret lists of firms and sectors they believe need the money.
Special Treasury projects are traditionally named after birds, with the names selected by a computer.
Shadow Health Secretary Jonathan Ashworth said: ‘This announcement – even if it’s ever delivered – falls significantly short of what’s needed to provide the quality, safe care to patients after years of Tory cuts.
‘Tory Ministers have repeatedly cut capital investment budgets in recent years. These smash- and-grab raids have meant over £4 billion slashed and seen the NHS repair bill spiral to £6 billion, putting patient safety seriously at risk. Tory MPs simply don’t care about the NHS.’
So WHERE is all this money coming from, Boris? PAUL JOHNSON asks how the PM plans to fund his £1.8bn cash boost to the Health Service
There has been no Election, no change of party in government, and yet the rhetoric of the past few weeks suggests a complete about-turn in economic policy.
After nine years of austerity, which has seen a record- breaking deficit brought under control through record-breaking spending cuts, all we hear now is ‘spend, spend, spend’.
Last week, new Chancellor Sajid Javid joined in, promising another £2 billion to ‘turbocharge’ No Deal preparations.
Remember, this is £2 billion on top of £4 billion already allocated by the last Chancellor for Brexit preparations. So, £6 billion and counting, just to tide us through the immediate costs of leaving the EU. That is a significant sum.
The real problem for Messrs Johnson and Javid, though, is that they don’t know what sort of Brexit we are going to get – and that really matters when it comes to the national finances
We will have to wait until this autumn’s Budget and spending review to discover whether the reality of Government policy matches the words, but it would be a big surprise if we didn’t see some serious spending increases.
Even in normal circumstances, austerity would be ending about now. The deficit is historically low – a real achievement given the scale of public borrowing back in 2010. Had Mrs May got her deal through Parliament, and were Philip Hammond still Chancellor, I think we’d be seeing quite significant spending increases.
The pressure on public pay, social care, jails, the justice system and local government is evident. Mr Hammond might have found £15 billion or even £20 billion on top of the billions already allocated to the NHS to deal with these pressures.
These sums would have meant a bit more borrowing but, crucially, would have avoided the level of public debt getting bigger as a share of national income.
There is a spanner in the works, however. The Bank of England has just downgraded its forecasts for economic growth, even assuming a Brexit deal is reached.
Last week, new Chancellor Sajid Javid joined in, promising another £2 billion to ‘turbocharge’ No Deal preparations
Economies around the world are slowing down, and our political situation is having a damaging effect on business investment. If the Bank is right, there will be less money to splash around.
The real problem for Messrs Johnson and Javid, though, is that they don’t know what sort of Brexit we are going to get – and that really matters when it comes to the national finances.
If we leave the EU without a deal, the economy will suffer. The medium term impact is clear: disrupting business with your richest and most important trading partner will reduce national income by tens of billions.
But what our economy will look like in a month, a year after leaving with No Deal is anyone’s guess.
So, what to do? Well, preparing for such an eventuality seems to make sense, if you think it is a real possibility. The scale of preparation suggests the chances are rather greater than the million-to-one against suggested by Mr Johnson. Who spends billions to insure against a one-in-a-million chance?
The Government implies that opening the spending taps will allow us to weather the No Deal storm. This is possible – but only if the spending is carefully directed to where the economy needs it. Spraying it around could actually be rather risky.
If the effect of No Deal is to create a series of logjams in the economy – at the borders, for example – and to increase prices as the pound falls, then boosting Government spending might either push prices higher still or prompt the Bank to raise interest rates.
If I were Chancellor, I would make no firm decisions on tax and spending until I knew what form Brexit was going to take.
And, if we do start opening the fiscal taps as a result of a No Deal Brexit, we’ll have to close them tight again later. We really should be consigning austerity to history, but we are in danger of talking our way into another dose of it.
