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

  • RW

    Your right to a degree. You mentioned “the wandering Jew”.

    I elaborate that the Jewish people, historically have tended to migrate almost exclusively to locations that are economically and culturally vibrant already. I would speculate that Jews have thrived in these places and have often improved the bounds of their economies and knowledge base.

    You can also ask; how many massive entertainment conglomerates, Nobel winners or billionaires has Isreal developed? If Jews are so capable, why isn’t Tel Aviv the Rome of our time?

    Jews are successful because they value education, maintain a strong social cohesive, they actively monitor and have a good sense for Zeitgeist wherever they are and they carefully choose the places they settle and congregate themselves heavily in these choice locations.

    But most importantly (haulocaust increased the importance of this aspect), they actually designed their culture for success. They not only attend Harvard, they use what they learned to better the group as a whole. With as much, they studied intricate networking systems, adapted to it and in many cases improved upon them. (See how Japan acquired Aegis warships and made them better).

    Of course there is nothing wrong with any of this. It’s when you elaborately gain disproportionate power in any society where you would stand out, you must take care when attempting to make a society better (Civil Rights movement) and rewriting that society all together (mass immigration). Ask blacks in China, Mexico, Philippines or India how much opportunity they have? Go to businesses owned by their American diaspora and see how many blacks they hire. Go to Silicon Valley and see how many East or South Asian tech workers wish they could work with more black people. California might work as a state, but as a nation, I think your rolling the nuclear dice here. I hope we can succeed as a tolerant pluralistic superpower but at this stage in human societal development, it’s a pipe dream.

    And if Jews really are the icon for success, they would see that fundamental human successes happen over generations. Just look at the rest of the planet? Are we ready?