The Conservatives' incredible health policy

The NHS Confederation has issued a report this morning that warns that seven years of plenty are coming to an end and seven years of famine are about to begin.

But riding to the rescue is Andrew Lansley, Shadow Secretary of State for Health.  Mr Lansley popped up on the Today programme at 7.10am to reaffirm that the Conservatives will increase real spending on the NHS.  Listen again here if only for John Humphrys' incredulity. 

There is indeed something incredible about the Conservative position on health spending.  It's a leftover from George Osborne's 2007 pledge to match all Labour spending.  It's the wrong policy for at least three reasons;

• At a time when Britain's debt mountain is causing international rating agencies to reconsider Britain's credit status it is unaffordable.  Public sector spending is set to soar to 53.4% of national income according to the IEA.  FIFTY-THREE POINT FOUR PER CENT!  That's more than in the aftermath of WWI.  On Platform last week, Andrew Lilico warned that higher spending is damaging Britain's economic performance and called for an emergency budget to scrap Labour's discretionary spending increases.
• As Andrew Lansley acknowledged on Today, NHS resources have trebled since Labour came to power but productivity has declined.  Taxpayers aren't getting value for money from what has already been splurged.  Perhaps, perhaps, perhaps we should promise to protect NHS expenditure in real terms but that should be the absolute upper limit of our commitment.  Promising inflation-busting increases in the current environment is not prudent.
• Protecting the NHS (and international development) spending will mean an even tougher squeeze on other departments' budgets.  Mr Lansley spoke of "very powerful spending constraint" elsewhere and mentioned 10% reductions over three years in the budgets for other departments after 2011. Many of these departments - unlike the NHS - have already been squeezed by Labour.  The Times carries a report today of how the Treasury is "crippling" the British Army in Afghanistan.

George Osborne and David Cameron talk often of tough choices.  They tell us the cupboard is bare and that we are entering an age of austerity.  The austerity is certainly being felt by the private sector.  In today's Independent Hamish McRae writes of a "chasm in attitude between the private and public sectors":

"The London tube strike coincided this week with the effective end of Cheltenham & Gloucester, now owned by Lloyds Bank, and the collapse of the rescue plan for LDV. As a result 1,660 jobs will be lost at C&G, while last Monday more than 800 lost their jobs when LDV was put into administration. Yet on the tubes there are no redundancies and talks apparently broke down over the reinstatement of two workers, not over pay or jobs."

Mr McRae concludes his article by noting that there are 23,596,000 private sector workers and 5,783,000 public sector workers.  The average pay of those private sector workers is now below those in the public sector but they have less job security and often less adequate pensions.  Unless the Conservatives get to grips with the size of the state - and that includes the size of the NHS - those private sector workers will get very angry indeed.

Tim Montgomerie