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Chancellor challenged on tax rise gamble

Gordon Brown's decision to fund NHS investment by increases in national insurance is "an own goal" a hospital consultant has warned.

As the prime minister and the chancellor embarked on a campaign to shore up support for the Budget, the NHS boss warned that it would hit low-earning hospital staff hard.

Peta Longstaff, an accident and emergency consultant at the Chelsea and Westminster hospital, said during a visit by Gordon Brown and Tony Blair that poorly paid NHS staff would be hit by the National Insurance tax increase.

Responding to the criticism, Blair said: "Yesterday was a hard choice to make - for the government and for people who have to pay more."

"It can't come for free. We have to decide as a country which is the fairest and best way to do it."

Blair and Brown visited the hospital ahead of an announcement by the health secretary on the government's NHS reform plans.

The changes include giving increased managerial freedom to the best performing hospitals, financial incentives to achieve quality targets, and the establishment of independent systems for the audit and inspection of hospitals.

Liberal Democrats have supported the rise, while Conservatives have claimed that extra spending will make little improvements without substantial reform of the service.

Tory leader Iain Duncan Smith has also criticised the Budget.

"The government has been raising taxes for the last five years...they have been spending more on things like the health service already without getting results. So there is no sudden change," he told the BBC Radio 4 Today programme.

"What we actually saw yesterday was for the first time the chancellor actually did it in a way that now everybody can recognise by taxing income. He has done it stealthily up to now but the effects have been the same."

However, on the same programme, Brown denied that any manifesto pledges had been broken.

"I believe when people look at the alternatives, which is being forced into private insurance or having to pay through charges or paying through taxation and the national insurance change...they will agree this is the right direction we have made," he said.

The chancellor has admitted that the increase in taxation is a "political gamble."

"Plain speaking I say to people you have to pay more but it's for the health service and we will be judged on whether we can make the health service better and I believe we can," he told GMTV.

"Yes, it's a gamble politically but it's not a gamble with the economy because the economy is stable. I don't think I'm nervous because I think it is the right thing to do...I do accept it's a hard and difficult choice I've made, but I want the best health service and so do the British public."

Published: Thu, 18 Apr 2002 00:00:00 GMT+01
Author: Sarah Southerton