Jeremy Hunt: NHS cash boost is not dependent on 'Brexit dividend'

Jeremy Hunt has conceded that having a “Brexit dividend” to partly finance an increase in NHS spending would depend on the economy outstripping forecasts, but he pledged the £20bn in extra annual funding would be provided even if this did not happen.

The health secretary, speaking before Theresa May unveils further detail of the five-year commitment on Monday, said the details of how it would be paid for would have to wait until the budget in the autumn.

Amid widespread scepticism over how the government plans to finance the increase, which will result in a £394m weekly rise in NHS spending by 2023-24, Hunt told BBC Breakfast the money would come from the end of contributions to the EU, as well as economic growth and “more resourcing through the taxation system”.

Challenged on the Brexit dividend – both the Office for Budget Responsibility and the Institute for Fiscal Studies have said it does not exist – Hunt insisted they were likely to be proved incorrect.

“There is debate between the thinktanks and the forecasters over what is going to happen with economic growth over the next five to 10 years. And one thing we should be clear about is those forecasts have often proved to be wrong,” he said.

The funding increase would happen anyway, Hunt added – potentially committing the Treasury to significant tax increases if the economy does not perform as well as hoped.

He said: “This commitment that we’re making is not conditional on this or that outcome on economic growth. We are making a firm commitment to the NHS for the next five years.”

Speaking later to BBC Radio 4’s Today programme, Hunt said some of the money would come from tax changes: “We are being very clear that there are implications for the tax burden, because in the end if you want the NHS to be the safest and one of the highest-quality systems in the world, faced with these demographic changes we are going to spend more money.”

The row over where the money will come from threatens to overshadow May’s speech, with two of her senior backbenchers who are also doctors, Sarah Wollaston and Philip Lee, casting doubt on the idea Brexit could finance the plan.

“The Brexit dividend tosh was expected but treats the public as fools,” Wollaston, who chairs the influential Commons health and social care committee, tweeted. “Sad to see government slide to populist arguments rather than evidence on such an important issue.”

Hunt said he could not give any further details on the financing: “The precise details of how we pay for it will be announced at the budget, but the reason we have announced this now is we want to give NHS leaders time to put together a 10-year plan. This is actually the first time there has ever been a 10-year plan backed with a five-year commitment to funding it.”

The shadow chancellor, John McDonnell, said he was pleased the government had “woken up” to the need for more NHS spending, but condemned the lack of detail on how it would be paid for.

“We need to have confidence in what’s being said,” he told Today. “It’s all well and good making an announcement like this and trying to hit the headlines, but to be credible you have to say where the money’s coming from, and we haven’t seen that.

“As the commentators have been saying all morning, the speculation about where it’s coming from, particularly the Brexit dividend, is just not credible.”

The decision to announce extra spending for the NHS and to frame it specifically as a benefit of leaving the EU has been widely seen as a sop by May to hardline Brexiters in her cabinet and on the Tory backbenches ahead of potentially crucial votes this week on the EU withdrawal bill.

Boris Johnson, the foreign secretary, who has stood by the EU referendum bus slogan that Brexit would free up £350m a week extra for the NHS, tweeted that it was “fantastic news”.

The gambit is likely to trouble other Conservatives, however, both in terms of whether the increase could instead mean higher taxes or more borrowing, and if it would even deliver a noticeable improvement to NHS services.

In another tweet, Wollaston said the increase, amounting to a 3.4% rise in real terms, would not improve matters without extra money for preventative treatments, social care and capital budgets.

The Local Government Association, which represents councils, said the NHS “cannot thrive” without new social care funding to keep people out of hospital and free up beds.

The IFS has previously said a 5% real-terms increase would be required for real change. The institute’s head, Paul Johnson, noted that 3.4% was higher than recent increases, but still below the long-term average.

Johnson told BBC1’s Sunday Politics that the EU money for the next few years had already been allocated, and that the Office for Budget Responsibility said Brexit would initially erode public finances by about £15bn a year.

“It could be a bit more, it could be a bit less,” he said. “As a pure, sort of arithmetic point of view, over this period, there’s no money.”