Budget boost for Philip Hammond as £13bn borrowing windfall set to fund NHS cash rise

Posted On: 
23rd October 2018

Philip Hammond may no longer have to raise taxes to help pump extra cash into the NHS after being handed a £13bn windfall in the public finances.

Philip Hammond The Chancellor has been under pressure to find extra cash for the health service.
Credit: 
PA

The Treasury had been ordered to find ways to increase NHS spending by £20bn a year by 2023-24, with the Chancellor telling aides that "nothing is off the table" to fund the rise.

But, in a major boost for the Chancellor which may help stave off rebellion on the Conservative benches, the Office for Budget Responsibility is expected to slash its borrowing forecasts by around £13bn this year, according to the Financial Times.

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The revision marks the biggest year-on-year change in borrowing forecasts since the data was first produced in the 1980s.

The change will radically alter Britain's borrowing projections through to 2022, allowing the Treasury to fund a significant chunk of the NHS cash boost over the next five years without hiking taxes.

Next week's Budget comes at a perilous time for the Government, with Tory Eurosceptics and the Democratic Unionist Party threatening to vote it down in a show of strength over Brexit.

In a sign of the pressure Mr Hammond is under, scores of Conservative MPs have put their name to a letter demanding that he scraps a planned 3.5% hike in beer duty.

The Sun reports that 54 Tories - around one in six of Theresa May's parliamentary troops - have signed the letter organised by Ribble Valley MP Nigel Evans.

The MPs are warning that the £100m increase will add 4p to the cost of a pint and put jobs at risk in the pub sector.

"Beer duty acts as a tax on our nation’s pubs, and has the unintended consequence of driving consumers away from community businesses to cheaper alternatives to buy beer, which is then consumed in the home," they warn.

Mr Hammond has already faced a backlash after plans were floated to axe a key Conservative income tax pledge in order to find extra cash for the NHS.

Some backbenchers have also demanded he stump additional funds for the beleaguered Universal Credit welfare shake-up.