Phillip Hammond
Image: © EU2017EE via Flickr

Where’s the second half of that NHS booster fund going to come from?

Answer: Borrowing, tax rises, or growth. Here's what that means

If you missed yesterday’s headline, it was basically a collective groan at the fact that yet again, we were debating whether Brexit could really fund £350m a week to the NHS.

What it means: The PM announced on Monday she wanted to increase the NHS budget to £394m a week, with half of it coming from money we’d saved by leaving the EU. Economists weren’t so sure that’d work - read why here.

Today, the topic of the town is where the second half of the money comes from. Philip Hammond, the chancellor, said funding it means he won’t have any money left for schools, prisons, defence, etc. That means the government’s got to either borrow more money from the central bank or increase taxes.

Thing is, the Conservatives promised in their manifesto to reduce taxes on businesses, working families, corporations, and VAT - oh, and to get rid of the ‘deficit’ by the mid-2020s, which means closing the gap between what Britain borrows and what it earns... so unless they break (at least) one of those promises, they’ve not got a lot of options.

The only other hope is that the country becomes more productive as a whole between now and when the budget comes out in Autumn (i.e. we have more ‘economic growth’) - given tax rates are generally percentages, the higher the total value of the goods and services we’re producing, the more comes back to the government in tax. Fingers crossed for Phil.

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Reader Comments

  • WhereAreTheVikings

    What a terrible, terrible shame. Western Civilization nurtured capitalism, and now capitalism is destroying it. And these young people seem to welcome the invasion of their homeland. The media and schools have been very efficient in wiping out all traces of blood and soil.

    • prollawalllynotahumanoid

      Capitalism isn’t the problem. It’s corrupt politicians taking bribes and kickbacks from Globalists and the Chinese.

      • WhereAreTheVikings

        Maybe I should have said crony capitalism. Although Italians importing Chinese to make “Italian leather” shoes is not crony capitalism. It is capitalism, pure and simple.

        • prollawalllynotahumanoid

          That would be crony capitalism and globalism combined. They aren’t concerned with the affect their policies have upon their citizens, the health and welfare of their society and culture or their economy. What it isn’t is fair-free trade to further national interests.

          • WhereAreTheVikings

            I’ve always seen them as one and the same, but perhaps they need to be named individually, just to bring home the point.

      • WhereAreTheVikings

        But now that travel is so easy and borders are virtually down through H1bs and the like, theoretically you can’t blame capitalists for the pursuit of cheaper labor, although I do heartily blame them not being more patriotic than that. Perhaps the emerging nationalism will force them to voluntarily do what they should have morally been doing all along, and that is employing business practices that preserve their countries and nationalities. The government should be doing everything it can to encourage that, to the extent that small government should do anything but guard the borders and strictly, drastically, limit immigration.

      • Henry Lam

        It is China with its corrupted mindset affecting the world.

        • prollawalllynotahumanoid

          No it is not. Capitalism is the fairest and least corrupt system of all.

          Socialism and communism is based on authoritarianism, coercion and police intimidation. It has and always will be rife with criminality, bribes and kickbacks.

          Corruption can be anywhere but it is the very basis of socialism and communism.

    • Henry Lam

      The government is too weak. They do not understand the mindset of communists and how they educate their people. Those communist people are only loyal to their country and could be dangerous. The immigration law should only accept those who accepted multiculturalism and taught from a democratic education system. This virus events clearly has shown how stupid to take China as a friend.

      • WhereAreTheVikings

        The government is not too weak. Just weak-minded about some things.

  • Gabi Rodrigues

    For how many days can a country maximum close their borders to foreigners maximum? Like now, with the virus, everyone is using 30 days. Can it be more?