Hammond plans to hammer top-earners’ pensions to fund NHS
Budget blitz on t ax break ‘will pay for £20bn health pledge’
CHANCELLOR Philip Hammond is planning to hammer the pensions of thousands of higher-rate taxpayers to fund Theresa May’s £ 20 billion- ayear boost for the NHS, The Mail on Sunday has learned.
And spirit drinkers together with small business investors are likely to face higher taxes in November’s Budget as Mr Hammond, right, tries to find the money needed to fulfil the Prime Minister’s pledge.
The run-up to this autumn’s Budget speech has already been marked by rows across Whitehall after Mr Hammond warned other big- spending Government departments that the money for the NHS would leave little scope for handouts elsewhere. There was a particularly bad-tempered response from Defence Secretary Gavin Williamson, who has lobbied overtly for a generous settlement for the MoD.
The Chancellor’s predicament has been eased by better-thanexpected forecasts of a £10 bil- lion surplus this year, but he has billions more to find.
A senior Government source said Mr Hammond had identified the £ 38 billion which is paid out from the public purse each year in pension tax relief as ‘one of the last remaining pots of gold we can raid’.
But it is likely the Chancellor will deprive only the wealthiest workers of the tax break, to limit the potential for a toxic political row reminiscent of the fury over Gordon Brown’s raid on retirement funds during Tony Blair’s premiership.
The source said Mr Hammond was planning to target ‘people who can afford to put tens of thousands of pounds into their schemes each year’.
The Treasury is also considering a further hike on spirit duties, following Mr Hammond’s decision to increase them by nearly four per cent last year. The current level of tax on a typical bottle of Scotch whisky is 79 per cent – one of the highest levels in Europe.
Mr Hammond is also understood to be looking to remove historic tax breaks for investors who plough money into small companies.
When Mrs May announced the NHS funding boost of an extra £20 billion a year by 2023 – to pay for thousands more doctors and nurses while cutting the number of cancer deaths and improving mental health services – she admitted that taxpayers would have to foot much of the bill.
Mr Hammond’s plans are likely to further irritate his critics on the right of the Conservative Party, who were infuriated by his claim last week that a no-deal Brexit would force the Government to increase borrowing by £80 billion a year.
Mr Brown’s decision in 1997 to abolish the tax perks on pensions which invested in dividend-bearing funds cost workers £118 billion.
A Treasury spokesman said: ‘ We don’t comment on Budget speculation.’
IF THE NHS is to be sustained and improved, it must also be reformed and made more efficient. The Mail on Sunday’s revelation today – that GPs have 3.6 million ‘ghost patients’ registered on their books – underlines the problem.
These patients, some dead, some long ago moved away, remain in the system, with GPs receiving £151 for every one, though almost all cases result from inertia rather than deliberate fraud.
But in that vast organisation, even minor failures to stay up to date can disadvantage patients. In this case, the Chair of the Public Accounts Committee points to a misallocation of almost £ 550 million. Just imagine how much good such a sum could do in so many cash-starved areas of the health system.
When the Chancellor is openly considering yet another raid on the pensions of the thrifty, to pay for health spending, the issue becomes more urgent still.
Far too often we forget that tax damages the very basis of a healthy economy – which must reward enterprise and prudence, rather than penalising them.
So before Philip Hammond reaches into our pockets to pay for a better NHS, he and his Cabinet colleagues need to do rather more than hire bodies such as Capita to try to cull the phantoms.
And those who work in the Health Service, often prominent in noisy campaigns for more spending, might more profitably examine their own departments and areas for possible savings.
Surely, the simplest way to reduce the number of non-existent patients is for the practices involved to use their common sense, and eliminate the phantoms. And any doctors who have been quietly content to look the other way and collect unwarranted payments should look to their consciences.
The NHS is so popular and so politically powerful that it could, if not restrained, end up eating our whole Gross Domestic Product. And if it did so, it would still be far from perfect.
Those who truly respect the NHS have a duty to hold its costs down – whether it is patients keeping their appointments and not wasting doctors’ t i me, or whether it is giant contractors building new hospitals. If we love it as much as we all say we do, then that should not be very difficult.