Chancellor Jeremy Hunt sets out stall to halt ‘vicious circle’ of tax hikes as pressure mounts

Published

1 year ago

September 30, 2023

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Chancellor Jeremy Hunt has vowed to tackle the “vicious circle of ever-rising taxes” by revamping public services and the welfare system.

The cabinet minister argued the state needed to become “more productive”, not bigger, as he pointed to the use of artificial intelligence to realise frontline efficiencies and reduce the burden on the public purse.

He also said the government was looking at welfare changes, with 100,000 people a year moving off work on to benefits “without any obligation” to look for a job.

Mr Hunt made his comments as the Conservative Party annual conference gets under way in Manchester this weekend, with some senior party figures demanding tax cuts.

It follows a report published this week that said the Tories will have overseen, between the 2019 election and the next general election, the biggest set of tax rises since at least the Second World War.

Analysis by the Institute for Fiscal Studies (IFS) thinktank said taxes will have increased to around 37% of national income, equivalent to around £3,500 more per household.

But despite the growing pressure, Mr Hunt told The Times newspaper: “We’re not in a position to talk about tax cuts at all.”

He added: “We need a more productive state, not a bigger state.”

“We need a state that doesn’t just deliver the services it currently delivers, but actually improves the services it delivers and recognises that there’s going to be more calls on those services with an ageing population,” he said.

“But we need to find a formula that doesn’t mean that we’re on a vicious circle of ever-rising taxes.”

More than 30 Tory MPs, including Liz Truss, Prime Minister Rishi Sunak’s short-lived predecessor, and former home secretary Dame Priti Patel, have vowed not to back further tax hikes.

Ms Truss, whose mini-budget 12 months ago triggered market turmoil in response to unfunded tax cuts and ultimately forced her from office, tweeted on Friday: “We should always seek to reduce the tax burden, especially when there’s so much pressure on family budgets.”

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In his Times interview, Mr Hunt also called for a more upbeat tone about the economy and said people needed to “shrug off a bit of the pessimism”.

Mr Hunt, who took over from Ms Truss’s sacked chancellor Kwasi Kwarteng, said: “When I started the job there was a lot of doom and gloom about Britain, our prospects.

“What I have realised now nearly a year on is that there is just far too much declinism.

“If you look at the fundamentals of the British economy we have had our setbacks like everyone else, we are the fastest-growing large European country, not just since the pandemic but since Brexit, since 2010.

“That’s a period when we’ve had a once-in-a-century pandemic, a global financial crisis that we were particularly exposed to, and a 1970s-style energy shock. Despite all of that the British economy has been very resilient.”

His remarks came after it was revealed the UK economy grew faster than had first been thought between January and March this year.

Data published by the Office for National Statistics shows UK economic growth was 0.3% from January to March, better than the 0.1% first announced.

The revision put the country’s economy ahead of both Germany and France in terms of post-pandemic performance but behind allies such as the United States, Canada, Japan and Italy.

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NHS league tables and cancelled pay rises for managers among government health reforms

Published

5 hours ago

November 13, 2024

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NHS league tables and cancelled pay rises for managers among government health reforms

NHS league tables revealing failing NHS trusts and cancelled pay rises or dismissal for managers who don’t turn things around are to form part of the government’s plans to improve the health service.

Health Secretary Wes Streeting is confirming new measures he hopes will boost failing hospital trusts and encourage successful ones.

The changes form part of the Labour government’s strategy to reduce waiting lists “from 18 months to 18 weeks”.

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Health and the state of the NHS were consistently among the most important issues for voters at this year’s general election – with Labour blaming the Conservatives for “breaking” it.

As health is a devolved area, any reforms proposed in Westminster would only apply to England.

Chief among Mr Streeting’s proposals is a “league table” for NHS trusts.

An announcement from the Department for Health and Social Care said: “NHS England will carry out a no-holds-barred sweeping review of NHS performance across the entire country, with providers to be placed into a league table.

“This will be made public and regularly updated to ensure leaders, policy-makers and patients know which improvements need to be prioritised.”

It also promises to replace “persistently failing managers” – with “turn around teams” being sent in to improve trusts running sizeable deficits or offering poor service to patients.

The government says “senior managers” who fail to make progress will not be eligible for pay rises.

There will be “financial implications” for more senior figures such as chief executives if their trust does not improve.

On the flip-side, those trusts that are deemed to be “high-performing” will get “greater freedom over funding and flexibility”.

Senior leaders at these trusts will also be “rewarded”.

The government says the current system is not incentivising trusts to run a budget surplus, as they cannot benefit from it.

Mr Streeting said: “The budget showed this government prioritises the NHS, providing the investment needed to rebuild the health service.

“Today we are announcing the reforms to make sure every penny of extra investment is well spent and cuts waiting times for patients.

“There’ll be no more turning a blind eye to failure. We will drive the health service to improve, so patients get more out of it for what taxpayers put in.

“Our health service must attract top talent, be far more transparent to the public who pay for it, and run as efficiently as global businesses.

“With the combination of investment and reform, we will turn the NHS around and cut waiting times from 18 months to 18 weeks.”

Concerns from health representatives

Amanda Pritchard, the chief executive of NHS England, said: “While NHS leaders welcome accountability, it is critical that responsibility comes with the necessary support and development.

“The extensive package of reforms, developed together with government, will empower all leaders working in the NHS and it will give them the tools they need to provide the best possible services for our patients.”

Further plans on how monitoring will be published by the start of the next financial year in April 2025, the government said.

Matthew Taylor, the chief executive of the NHS Confederation – a body that represents all NHS trusts – said healthcare leaders welcome the “government’s ambition”.

However, he said he was concerned league tables and reducing pay may “strip out” the nuance of what’s going on.

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Mr Taylor said: “NHS staff are doing their very best for patients under very challenging circumstances and we do not want them feeling like they are being named and shamed.

“League tables in themselves do not lead to improvement, trusts struggling with consistent performance issues – some of which reflect contextual issues such as underlying population heath and staff shortages – need to be identified and supported in order to recover.”