28/11/2001

Chancellor’s comments raise ‘increased tax’ concern

Speculation that tax increases might be needed to pay for Gordon Brown’s suggested NHS improvement scheme has been fuelled by a statement from Tony Blair that fails to rule out such a measure.

Confident that the economy would meet this year’s economic growth target of between 2.25 and 2.75 per cent, the Chancellor announced an extra £1 billion for the NHS in his pre-Budget report - but raised the possibility that any further increases in funding would have to arise from a “significantly higher share of national income”.

Commenting on the address, an official spokesperson for Tony Blair indicated that the Prime Minister “absolutely agreed” with Gordon Brown as to how best to invest in a health service that meets public expectations. The spokesperson also stressed that the Prime Minister realised that this would require a review of NHS operations before any greater tax expenditure was considered.

However, the Conservative party has criticised the suggestion of an increase in tax as the best possible approach to NHS reform, with Shadow Chancellor Michael Howard describing Mr Brown’s pre-budget report as “the same old story”.

Speaking to BBC News, he said: “If you look at other countries which deliver better healthcare than we do, which keep their people alive from illnesses and conditions where I’m afraid they would die in this country, the key difference is not in the amount of money they devote to healthcare, it’s in the other resources which they are able to bring to bear.”

In addition, it is thought that to fulfil the Chancellor’s vision, taxes might have to be considerably higher than their current level, in order to pay for an NHS in crisis. (CL)

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