May in clash over the NHS ‘Brexit dividend’

THERESA MAY has clashed with the official forecaster after it dismissed claims that a “Brexit dividend” could be used to help give the NHS a £20 billion funding boost.

The Office for Budget Responsibility (OBR) said that the funding commitment will put debt on an “unsustainable upward trajectory” without tax rises or spending cuts to pay for it, adding that “provisional analysis” suggests that Brexit is more likely to “weaken the public finances than to strengthen them over the medium term”.

However, the Prime Minister’s official spokesman insisted that there will be a Brexit dividend, which formed a central plank of the Leave campaign during the EU referendum.

He said: “There are substantial sums we are currently sending to Brussels. Once we leave the EU we will no longer be doing so and we will be free to spend that money on national priorities, which the Prime Minister has been clear is our National Health Service.”

The OBR said that without tax rises or cuts elsewhere, public sector net debt could rise from 80 per cent of national income in 2022 to almost 283 per cent by 2067.

The OBR said: “On current policy we would expect the budget deficit to widen significantly over the long term, putting public sector net debt on a rising trajectory as a share of national income. This would not be sustainable.”

It added: “Leaving all or part of the June 2018 health spending announcement unfunded would simply require greater action later.”

Mrs May has conceded that taxes will have to rise to fund the NHS budget boost, but declined to say which ones or by how much.

Philip Hammond, the Chancellor, said: “We must continue to deliver on our commitment to fix our public finances, and we must reject the arguments of those who think that debt can rise again without consequences.”

“Our balanced approach is getting debt falling, keeping taxes low, supporting our valuable public services, and investing to raise productivity.”

Under the projections, health spending will rise from 7.6 per cent of national income in 2022-23 to 13.8 per cent by 2067-68.