Conservative Diary

« Cameron fears can of worms for relations with Clegg if Merkel, Sarkozy insist on Treaty changes to save €urozone | Main | Coalition announces £2bn more savings »

Even Andy Burnham thinks George Osborne's NHS spending pledge is "irresponsible"

This morning Andy Burnham, Labour leadership contender and former Health Secretary, said what every sensible commentator believes:

"It is irresponsible to increase NHS spending in real terms within the overall financial envelope that [George Osborne], as Chancellor, is setting. The effect is that he is damaging, in a serious way, the ability of other public services to cope: he will visit real damage on other services that are intimately linked to the NHS. The health service needs functioning day care, and housing and meals."

Screen shot 2010-06-17 at 11.29.09 ConservativeHome has long campaigned against the decision to ringfence NHS spending (eg here). We mothballed the campaign in the months leading up to the election for obvious reasons. As the table on the right (from Policy Exchange) shows, the Coalition is protecting the budgets that grew fastest under Labour in order to cut the budgets of those departments (like defence and transport infrastructure) where growth was weakest.

The consequences of ringfencing the NHS budget will, says Policy Exchange, mean that the budgets of other departments may have to be cut by 20% to 30%. This, PX continues, "will undo all the real terms spending rises of Labour era for many departments; in some areas spending will be taken back decades." My emphasis. The other alternative is, of course, higher taxes on families and businesses. My own view is that taxes (like higher CGT and broader VAT) should not rise until spending efficiencies have been exhausted. That is one of my benchmarks for next week's emergency budget.

The Coalition is pursuing better value for money in the NHS. Today's Times reports (£), for example, that Andrew Lansley has found £250m of savings from NHS management costs. A good start. The government's intention, though, is for all savings to be reinvested in the NHS budget. I readily agree that the NHS faces extreme cost pressures - because of technological advance and demographics - but it is ludicrous that it does not share some of the burden of the very difficult budget cuts.

My own advice to George Osborne is the same as last July; protect the NHS frontline but not the whole, bloated budget. I think voters will readily understand that but time is running out for, let's call it, an 'adjustment' of policy.

Tim Montgomerie

PS I've written for today's Times (£) about the need for George Osborne to set out a radical growth agenda in next week's emergency budget.


You must be logged in using Intense Debate, Wordpress, Twitter or Facebook to comment.