Brits face £10bn tax raid as Theresa May confirms we’ll have to pay ‘a bit more’ to fund NHS spending boost

THERESA May today confirmed that she will hike taxes to fund a spending boost for the NHS - prompting fears of a £10billion tax grab.

The PM admitted the cash increase can’t be paid for entirely by the money we’ll save by quitting the EU, saying: “Taxpayers will need to contribute a bit more.”

She also said that the NHS is “under strain” after eight years of austerity, with doctors and nurses complaining that the situation is “not sustainable” as Brits live longer and need more medical care.

Mrs May has announced a £20billion boost to health spending - to be funded from more borrowing, the cash we save from Brexit and an estimated £10billion in tax hikes.

But she refused to say exactly which taxes would rise - saying it will remain a secret until the autumn.

And the head of the NHS later admitted he doesn't know when standards will start rising again as a result of the spending injection.

During her speech, the PM also:

• Vowed to guarantee the NHS’s future for at least the next 70 years
• Warned that increased life expectancy is putting pressure on health services
• Praised the NHS for helping her in her personal struggle with diabetes
• Called on health service bosses to lay out a ten-year reform plan to ensure the NHS doesn't collapse

Speaking in London, she said: “Despite more funding, more doctors and more nurses, our NHS is under strain.

“Our NHS staff are rightly proud of what they do, but they worry that their current workload is not sustainable.”

Mrs May confirmed reports that NHS spending would go up by £20billion a year, saying: “By 2023/24 the NHS budget will increase by over £20billion in real terms compared with today. That means it will be £394million a week higher in real terms.

“So the NHS will be growing significantly faster than the economy as a whole, reflecting the fact that the NHS is this government's number one spending priority.

“This money will be provided specifically for the NHS. And it will be funded in a responsible way."

She said some of the funding can come from the "Brexit dividend" we'll get after leaving the EU - but warned that won't cover the whole bill.

The PM said: "Some of the extra funding I am promising today will come from using the money we will no longer spend on our annual membership subscription to the European Union after we have left.

"But the commitment I am making goes beyond that Brexit dividend because the scale of our ambition for our NHS is greater still.

"So, across the nation, taxpayers will have to contribute a bit more in a fair and balanced way to support the NHS we all use. We will listen to views about how we do this and the Chancellor will set out the detail in due course."

Asked whether "working families" would face a higher tax burden, Mrs May replied: "Taxpayers will need to contribute a bit more, but we will do that in a fair and balanced way - and we want to listen to people about how we do that."

And invited by The Sun to rule out a hike in income tax, national insurance or VAT, the PM refused to answer.

The PM shot down claims the Brexit dividend is a myth, saying: "It’s very simple - we’re not going to be sending the vast amount of money to the EU that we spend every year on the EU as a member of the European Union.

"That money will be coming back and we will be spending it on our priorities, and the NHS is our number one priority."

In her speech Mrs May hit out at Labour’s claims that only they can be trusted to protect the nation’s beloved health service, saying: “The NHS was the crowning achievement of the post-war Lab government... but the NHS does not belong to any single party.”

In a bid to see off claims the Tories are keen to privatise the NHS, the PM said: “This great national institution that is there for us from cradle to grave should remain in public hands - not just now, not just for the next 70 years, but forever."

And defending the Government’s record, she added: “At a time when we had to make difficult decisions on Government spending, we protected and prioritised the NHS with real-terms increases in spending each and every year.”

Since 2010, ministers have given more cash to the NHS every year - but the spending increases have lagged far behind the long-term average, adding to the strain on services.

Mrs May insisted she had a personal stake in the health service - describing how NHS doctors and nurses helped her cope with her diabetes and ensure it didn't hold her back in her career.

The PM said: "It was there for me when I was diagnosed with Type 1 diabetes. I will never forget the support - not just of my GP and consultants - but also the clinical nurse specialists attached to my local hospital.

"Their advice was critical - enabling me to adjust to the new treatment regime, to manage my condition, and minimise the impact it has on my life.

"I would not be doing the job I am doing today without that support."

Mrs May also urged the Scottish and Welsh governments to follow her lead by boosting NHS spending in their areas so they don't fall behind England.

Carl Emmerson of the Institute for Fiscal Studies predicted a huge tax hike to fund the NHS promise, saying: "If the Chancellor is taking his deficit target seriously, it would not be a surprise to see a £10billion tax rise. A tax rise of that magnitude would lead to many working families paying more."

Speaking after the Prime Minister’s speech, NHS England chief executive Simon Stevens admitted he’s not sure when patients will start to see improvements in the health service.

Asked by MPs on the Commons public accounts committee when care will get better, he said: “You’re asking me to say today what the outcome and the content of the 10-year plan will be that we will develop with frontline staff between now and November.”

Mr Stevens added that the cash won’t begin to flow to the NHS before next April - but insisted he’s not worried about where the money will actually come from.

He told the committee: "Both the Prime Minister and the Chancellor are crystal clear that this money will be available to the National Health Service over the next five years.

"Obviously where that is sourced from is a matter for the Chancellor of the Exchequer. But I can confirm that by 2023, the end of this five-year period, the NHS will indeed be getting more than £350million a week in real terms."

Earlier, Health Secretary Jeremy Hunt admitted the Treasury would hike taxes to fund the cash boost - but refused to say where the new levies would fall.

Mrs May faces a backlash from Tory MPs over the prospect of “stealth taxes” which could hit working families.

Ministers want to use the Brexit dividend to pay for a large part of the extra NHS cash.

But there is still an £11billion black hole in the Government’s plans which will need to be funded by new taxes, extra borrowing or cuts to other public services.

Mr Hunt today admitted he’d had “very difficult discussions” with Chancellor Philip Hammond over the spending hike, with talks going “down to the wire”.

He told BBC Radio 4’s Today programme: “The Chancellor wanted to be absolutely sure this was a sum of money he could commit to.

“A lot of thinking at the Treasury has gone on to ensure this can be afforded - we’ve been very clear there will be an increase in the tax burden to pay for it.”

Asked how the cash would be raised, Mr Hunt said: “We are absolutely clear that we will be able to explain exactly where every penny is coming from, but we will do that in the Budget… The Treasury has done its sums.”

The annual Budget is not expected for at least four months, meaning the public could be in the dark until the end of this year.

But the Health Secretary insisted Mrs May deserves credit for daring to raise taxes, saying: “For a Conservative Prime Minister to say, ‘Yes, taxes are going to go up,’ is a very difficult decision.”

Speaking in the Commons this evening, Mr Hunt said: "Some of the new investment in the NHS will be paid for by us no longer having to send annual membership subscriptions to the EU after we have left.

"But the commitment that the government is making goes further and we will all need to make a greater contribution through the tax system in a way that is fair and balanced."

Challenged by Labour MPs, he added: "The main reason we are able to announce today’s rise is not the Brexit dividend but the deficit reduction dividend."

As well as using the money that we will no longer have to send to Brussels after Brexit, the Government is likely to freeze the income tax thresholds - meaning more low earners will get sucked into paying tax while middle-income families will have to shell out the 40 per cent rate.

Furious Tories have warned Mrs May she could end up betraying her voters if she hikes taxes too much.

One senior MP told The Sun: “Conservatives don’t put up tax. The PM is essentially saying the economic situation doesn’t matter anymore.”

And ex-minister John Redwood warned the extra NHS funding would be wasted if it doesn’t go straight into frontline services.

Kate Andrews of the free-market Institute of Economic Affairs said: "Make no mistake - freezing thresholds to raise more money for the NHS is a stealth tax.”

Ministers have also been accused of not pledging enough cash following years of below-average spending increases for the NHS.

The Health Foundation described the announcement as a “giant sticking plaster” which wouldn’t fix the health service’s problems.

Shadow Health Secretary Jonathan Ashworth said Labour would increase the NHS budget by 5 per cent a year, compared to the 3.4 per cent promised by Mrs May.

And controversy has raged about the promise of a Brexit dividend which will be used to pay for the NHS - with some economists claiming that quitting the EU will weaken the public finances.

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