Theresa May refuses to say which taxes will rise to pay for £20bn NHS boost

Rob Merrick

Theresa May has refused to say which taxes will rise to pay for her £20bn a year NHS boost, amid a storm of criticism over her claim of a “Brexit dividend” to part fund it.

Pressed on her admission that tax hikes will be needed, the prime minister gave no details, saying only that “we will be contributing more as a country”.

Meanwhile, independent experts and a senior Tory MP dismissed Ms May’s claim – echoing the much-derided Leave campaign – that the government would have extra cash from leaving the EU.

“Don’t even begin to swallow any rubbish that this will be some Brexit bonanza,” tweeted Sarah Wollaston, the Tory chair of the Commons Health Committee.

“In reality the tax rises & borrowing will need to be higher as a result.”

Paul Johnson, the head of the respected Institute for Fiscal Studies (IFS), said the government had accepted that Brexit would swipe £15bn a year from revenues – or £300m a week.

Furthermore, the “divorce bill”, plus commitments to replace Brussels funding in key areas, would swallow up all of the returning EU contributions until 2022.

“There is no Brexit dividend,” Mr Johnson said.

Quizzed by the BBC’s Andrew Marr on the tax rises to come, Ms May said: “The chancellor will announce the details in due course.”

And she claimed: “There are many aspects that will change over the next few months potentially. We will be looking at economic growth and at other issues.”

Chancellor Philip Hammond is expected to opt for “stealth taxes”, by delaying or scrapping promises to raise income tax thresholds – which will anger many Tory MPs.

But Mr Johnson said that would not come close to bringing in the funds needed, warning it would require “more than a couple of pence” on income tax and adding: “£20bn is a big number.”

The extra £20bn a year, promised by 2023-24, marks a dramatic break with eight years of austerity and follows a difficult battle with the Treasury for more funds.

However, the annual real-terms increase will be around 3.4 per cent, not the 4 per cent pleaded for by Simon Stevens, the outspoken NHS England chief executive.

During the interview, the prime minister also:

* Appeared to admit the £20bn could still be allocated even if Britain stayed in the EU – describing the question as ‘completely hypothetical”

* Hinted the increase in the early years may be less than 3.4 per cent – saying “it may vary a little from year to year”

* Refused to say when cancer waiting targets will finally be hit – they have been missed for more than two years

Labour said it would match the new Tory spending plans and “go further” with extra increases from scrapping corporation tax cuts.

John McDonnell, the shadow chancellor, described them as “a pre-election gimmick”, saying: “Can you imagine if I came forward with this?

“There would be accusations of magic money trees – it’s a magic money forest that has come out this morning.”

But, standing by her Brexit dividend claim, Ms May said: “As a country we will be contributing more, a bit more, but also we will have that sum of money that is available from the European Union.”