Rachel Reeves has announced a £22.6bn increase in day-to-day spending on the NHS in her budget as she promised to “invest invest invest”.
The chancellor said the Tories had overseen “the most austere decade” in the health service’s history and her plans, including an additional £3.1bn in capital spending, amount to the “largest real term growth” in its funding outside the pandemic since 2010.
Politics latest: Key points in the budget
Ms Reeves made the pledge alongside a raft of tax hikes, increased borrowing and spending in the first fiscal statement Labour has delivered since it was last in government 14 years ago.
She said her party would publish a 10-year plan for the NHS in the spring which would set out how to deliver “a shift from hospital to community, from analogue to digital and from sickness to prevention”.
However, she said “reform must come alongside investment” and the funding increase was a “down payment on that plan”.
“Today, because of the difficult decision that I have taken on tax, welfare and spending, I can announce that I am providing a £22.6bn increase in the day to-day health budget and £3.1bn increase in the capital budget over this year and next year,” she said.
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“This is the largest real-terms growth in day-to-day NHS spending outside of COVID since 2010.”
The money will deliver repairs to crumbling hospitals, tens of thousands of more procedures and fund new beds and diagnostic tests, Ms Reeves said.
She said this should enable the NHS to deliver a 2% productivity growth next year while helping to fulfil longer-term manifesto pledges to bring waiting lists down and create 40,000 extra hospital appointments a week.
Speaking in the Commons afterwards, Lib Dem leader Sir Ed Davey welcomed the measures but asked when the government would be able to guarantee that people will be able to see a GP or an NHS dentist when they need one.
He also accused Labour of “ignoring the elephant in the NHS waiting room – the crisis in social care”, saying the announcements today “won’t touch the sides”.
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In the budget, Ms Reeves also promised “over £5bn of government investment” in housebuilding, with £1bn to strip dangerous cladding from buildings.
This comes on top of £1.4bn to rebuild more than 500 schools as part of a 19% real-terms increase in the Department for Education’s capital budget, along with £2.1bn for school maintenance.
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The investment will be funded by higher borrowing and a £40bn package of tax rises, including a £25bn rise in employers’ national insurance contributions, increases to capital gain tax, a rise in stamp duty for second homes and extra levies on vapes, tobacco, most alcohol and soft drinks.
Other measures include keeping the freeze in fuel duty, increases to minimum wage and the carer’s allowance and cutting draught duty by 1.7% to knock “a penny off a pint in the pub”.
Government departments will also be required to meet a 2% “productivity, efficiency and savings target”.
The chancellor said the measures were necessary because of a £22bn “blackhole” in the public finances left behind by the Tories, promising to publish a “line by line breakdown” of that.
The budget will “restore stability to public finances and rebuild public services”, she added.
But outgoing Conservative leader Rishi Sunak accused Ms Reeves of “fiddling the figures” by changing the way debt is measured in order to raise money for investment.
“The reason the chancellor has increased borrowing and increased taxes is because she has totally failed to grip public spending,” he added.
