Promise of gruel
Politics can be dizzying sometimes. Less than two months ago, in late September, Conservative MPs cheered the last Chancellor as he slashed taxes across the board. Today, those same MPs cheered the new Chancellor as he hoicked them back up. But today’s cheers felt oddly out of place when the news was so grim, and all of it will have a big impact on the NHS and on household budgets.
The Chancellor, Jeremy Hunt, admitted that Britain is already in recession, meaning our economy is shrinking. Added to that, official figures now predict that it will continue to shrink next year too, and that unemployment will rise. A smaller economy and fewer people in work makes it harder to raise money to pay for public services.
September’s monumentally disastrous mini-Budget from ex-PM Liz Truss and ex-Chancellor Kwasi Kwarteng is estimated to have cost us £30 billion, made up of a mixture of unfunded tax cuts and a big jump in the interest rate the government pays on the nation’s debts because Truss and Kwarteng had so panicked the international markets. The colossal stupidity of that mini-Budget has led to much of today’s bad news.
Indeed, the Chancellor admitted that what he was announcing today amounted to a “substantial tax increase.” Take the amount people pay in income tax, for example. This will rise through a so-called stealth tax, with the Chancellor freezing income tax thresholds until 2028. That means that as your pay creeps up, however modestly, more of it will get taxed. This does not affect Scotland, which sets its own income taxes.
Bills will rise too. From next April, for example, the Chancellor has decided that help with energy bills will be less generous, costing a typical household an extra £500 per year. With the Chancellor saying today that inflation will be over nine per cent this year and still over seven per cent next year, the cost of everything is shooting up, with little relief in sight.
The news for the NHS and midwifery is more mixed, but mostly worrying.
There are two pieces of positive news. Firstly, the Chancellor announced that the Government and the NHS will work together on published an independently verified, long-term workforce plan for the NHS in England. This plan will look at likely workforce needs in five, 10 and 15 years’ time, and will set out how many doctors, nurses and other staff groups like midwives will be needed in the future.
This is something Jeremy Hunt pushed for earlier this year when he was a backbencher, and he is now implementing as Chancellor. We supported his efforts then, and have continued to push for this kind of long-term workforce assessment, and we welcome this announcement now.
Secondly, there is a bit of good news that the Chancellor did not mention this in his speech but which we have found as we ploughed through the thick documents that underpin today’s announcements. The Government is committing to an extra 2,000 NHS midwives in England. It is always positive to get the Government to commit officially and in writing to something of this kind. With maternity services desperately short-staffed, we can now put real pressure on the Government to honour their commitment.
What is missing however is exactly how they will increase the number of midwives by 2,000. It is one thing to commit to something on paper, and a whole different challenge to make it happen. So, there was no movement today on NHS pay, which plays such a fundamental role in attracting and retaining staff, with midwives, maternity support workers and others still expected to accept what amounts to a pay cut once you take account of rising prices. How will that help boost midwife numbers?
The promised extra £3.3 billion for the NHS in England this year and next (with proportionate amounts going to the governments in Scotland, Wales and Northern Ireland) will soon get gobbled up in a thousand different ways, not least the higher energy bills that hospitals face, leaving little or nothing for extra staff.
There is a lot in today’s mini-Budget, some of it with potential, but most of it pretty grim. There are bits of it that the RCM can use to push for improvements, not least the commitment to 2,000 more NHS midwives in England. But unless and until the Government moves on big issues like NHS pay, there seems little hope that they will convert their ambitions and hopes into reality.