Labour have changed their policy on health spending after being out-bid by the government.
And they’re not being clear about how they’ll fund their new plans.
Claim 1: “The money announced [by the government in June] is not enough to save our NHS after eight years of Conservative austerity”
After years of squeezed budgets for the NHS, the government announced last month that the ailing health service would finally get some extra cash.
We agree with Labour that this is probably not enough. Last month, FactCheck concluded that while the money would be welcome, NHS budgets will still rise much more slowly than they have over the history of the health service – despite our growing, and ageing, population.
But here’s the thing. Labour have dismissed the government’s plan as “insufficient” and “not enough to save our NHS”, even though the government’s package is more generous over five years than the one Labour put forward in last year’s Election manifesto.
Labour’s 2017 Election plans would have seen NHS budgets rise by 2 per cent a year on average in real terms over the next five years, according to the independent Institute for Fiscal Studies. The Tories are now pledging 3.4 per cent.
Not to be outdone, Labour now say that they plan to raise NHS budgets by 5 per cent a year “for all years”.
Claim 2: Labour’s NHS plans are “fully costed”
Labour have criticised the government for not giving enough detail on how it will fund extra money for the NHS. But from what we’ve seen, Labour haven’t provided much detail on their own policy either.
The shadow health secretary, Jonathan Ashworth, said after the government’s announcement in June:
“If the Conservatives do manage to publish the detail of their insufficient 3.4 per cent increase, then Labour’s fully costed plans to raise taxes for the top 5 per cent and big business will top up NHS spending growth to around the 5 per cent which is needed.”
The “fully costed plans” he refers to are those set out in the document Labour published at the 2017 Election, called Funding Britain’s Future.
To their credit, that document gave a pretty detailed account of how Labour would fund day-to-day spending, and put the Conservatives – who failed to put forward any costing documents at the Election – to shame. We did a FactCheck analysis on the plan at the time.
The problem is, Labour’s costing document is now out of date. It gives a snapshot of what the public finances would have looked like in 2020-21 if Labour had won the 2017 Election. Labour’s calculations must have been based on the assumption that it would raise NHS spending by 2 per cent a year on average from 2017 to 2020-21.
But that didn’t happen because they lost the Election, and Labour have now dramatically changed the underlying assumptions about NHS spending.
As of June 2018, the party is committed to a 5 per cent annual increase in NHS budgets, rather than the 2 per cent average annual increase they pledged at the Election. This could add tens of billions to Labour’s financial commitment to the NHS.
We asked Labour where the new money would come from, but they reiterated Mr Ashworth’s earlier statement from June. So let’s revisit that ourselves.
The odd thing about Mr Ashworth’s comment is that it acknowledges that Labour are actually waiting for the Conservatives to publish their figures first, before Labour follows suit, despite claiming to already have “fully costed plans”. We can’t see how that’s not a contradiction-in-terms.
Why the sudden change?
A Labour spokesperson told FactCheck that the party have decided to raise the NHS budget by 5 per cent a year, “the figure which many health experts are saying is needed to deliver improvements.”
It’s true that the British Medical Journal recently published an article suggesting that NHS funding would need to rise by between 3.3 per cent and 5 per cent a year over the next 15 years.
But, despite what the party appear to suggest, it’s not clear that Labour are making this significant policy shift because health experts say it is needed.
If that were the case, why did the party offer to increase NHS funding by just 2 per cent a year at the last Election?
Labour’s Election package was the most generous of the three main parties’ plans, but the independent Institute for Fiscal Studies concluded that there were “Challenging times ahead for the NHS regardless of who wins the election”.
In other words, it was known in 2017 that even Labour weren’t pledging quite enough money for the NHS. And yet it took a whole year for Labour to change its policy.
It seems Labour decided to adopt the recommendation of those health experts a day after the government announced that it would inject more cash into the health service.
Labour say that the government’s plans to increase NHS funding by 3.4 per cent are “insufficient” and “not enough to save our NHS”. They may well be right. But they neglect to mention that the government’s new NHS package is more generous than the one that Labour put forward at the 2017 General Election.
Labour say they will now increase NHS budgets by 5 per cent every year for five years.
Labour are correct to suggest that the government has been vague about how it will fund its new plans. But Labour themselves haven’t produced a fully costed plan for their own policy shift – despite what they claim. Their only published costing document (from before the 2017 General Election) is now out of date because they’ve pledged tens of billions more for the NHS than they promised at the Election.
Labour have been unable to explain exactly how they’ll fund this significant new spending, but have suggested that they are waiting for the government to do some of the calculations for them. Labour have said that they will raise some taxes on top earners, but haven’t released any further detail.
Labour suggest they’re now increasing NHS funding by 5 per cent a year because that is what health experts say is needed. But if Labour really are making policy on the basis of expert opinion, why did they offer a mere 2 per cent budget rise for the NHS at the last Election? And why did they only change their policy to a 5 per cent commitment the day after the government’s own announcement in June 2018?