How an armchair promise by Tony Blair led to some unhealthy tensions in Downing Street

Gordon Brown faces more questions on health spending as the Prime Minister's pledge to match Europe continues to discomfort the Treasury

Andrew Grice
Monday 10 December 2001 01:00 GMT
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Tony Blair's pledge to raise the level of health spending in Britain to European Union levels is a promise that looks certain to return to haunt him.

The commitment has caused friction between himself and Gordon Brown, the Chancellor, who does not want to be tied to a particular level of funding or a "moving target" related to spending by other countries. The Treasury has already buried the pledge once, only for Mr Blair to revive it again in recent weeks as the National Health Service shot to the top of the political agenda.

The Prime Minister first outlined the goal of increasing health spending to the average level in the EU within five years while sitting on the relaxing sofa in the BBC studio of Sir David Frost in January last year. The early-morning interview enraged Mr Brown, who saw it as an attempt to "bounce" him into announcing extra money for the NHS in his Budget in March. He is said to have accused Mr Blair of "stealing" his Budget.

After some tense exchanges between Number 10 and Number 11, Mr Blair's promise was downgraded to an "aspiration". Pressure from Mr Brown led to the five-year target being removed from Labour's manifesto at this year's general election, which said: "Over time we will bring UK health spending up to the EU average."

The watering down was barely noticed because most attention focused on the manifesto's plans to make greater use of the private sector to cure the ills of the NHS. At the Treasury, there was quiet satisfaction that Mr Blair's rash promise had been buried.

So little wonder that Mr Brown sat stony-faced when Mr Blair unexpectedly disinterred the promise two weeks ago when answering a question from Charles Kennedy, the Liberal Democrat leader, during Prime Minister's Question Time. Asked whether his initial pledge and target date still stood, Mr Blair replied: "Of course it is."

Inevitably, experts began putting flesh on the bare bones of Mr Blair's policy. The Institute for Fiscal Studies estimated that the pledge would cost £10bn. A furious Treasury hit back, insisting Britain was already on course to raise the share of gross domestic product devoted to health to 7.7 per cent by 2003-04, and saying this would be only 0.3 percentage points below the EU average of 8 per cent.

Perhaps Mr Blair had Mr Brown's words ringing in his ears when he was interviewed by The Independent on Sunday a week ago. He caused further confusion over his policy when he appeared to downgrade his pledge, saying: "I am not deciding spending levels now. We have in broad terms to match other European countries."

The waters were further muddied when Treasury officials gave evidence to the Commons Treasury Select Committee last week, speaking of Mr Blair's pledge as an "ambition" and refusing to be tied to a figure.

When Mr Brown appears before the same MPs tomorrow, he will be questioned on a study for the committee, disclosed in The Independent today, which will make uncomfortable reading for the Government. With health spending on the Continent rising, the memorandum suggests, Mr Blair will miss his target unless he pumps £45bn billion a year into the NHS by 2005-06.

The figure will cause more palpitations at the Treasury over the health budget. Another problem is that, if Mr Brown's growth forecasts are right and the British economy does better than those of its EU rivals, health will take an even bigger share of their national income – making Mr Blair's target even more elusive.

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