Phillip Hammond, the Chancellor of the Exchequer, is set to deliver his first Spring Budget on Wednesday 8th March. M&F outline the Budget’s potential ramifications for social care, Research and Development (R&D) within science, and public health.
Social Care
Given the much-maligned state of social care, where spending has fallen on average by 2.2% every year despite growing demand (National Audit Office, Financial sustainability of the NHS, November 2016), there have been calls from a number of key stakeholders and organisations for investment plans to be set out in the Budget. Age UK has warned that efforts so far – including moving money from NHS budgets, the social care precept and calling on family and friends – are woefully inadequate. Given an expected black hole in social care budgets of £2.6 billion - £4.3 billion by 2019-20, we suspect such calls will be heeded by Phillip Hammond. The sudden withdrawal of Surrey County Council’s referendum, on a prospective council tax rise, has further fuelled suspicions that the council has been tipped off about an upcoming announcement on funding.
Amongst a number of possible proposals to alleviate the crisis in social care, it has been rumoured that the Government may seek to introduce a levy on estates, otherwise known as a ‘death tax’. However, consideration of such a tax was denied by Jane Ellison, Financial Secretary to the Treasury, following questions from Andy Burnham MP:
Andy Burnham: Back in 2010, to meet the rising costs of social care I proposed a compulsory care levy on all estates. From memory, the Conservatives produced an election poster with gravestones on it and called it a death tax. I read in The Times today that Ministers are now considering exactly the same proposal. Can this possibly be true?
Jane Ellison: No.
Research and Development
In late January 2017, Chris White, Conservative MP for Warwick and Leamington, questioned whether the Government would look at reforming the tax environment for Research and Development. David Gauke, Chief Secretary to the Treasury responded:
As announced in November 2016, the Government is reviewing the tax environment for Research and Development (R&D) to look at how to make the UK an even more competitive place to do R&D. The review is due to conclude at the Spring Budget.
Public Health
Despite the enormous costs involved in tackling obesity, lack of physical activity, smoking, exposure to air pollution and alcohol abuse, recent years have seen public health budgets undergo significant cuts. However, rather than increasing public health budgets, it appears the Government is set to increase taxes on alcohol and tobacco.
Both the Alcohol Health Alliance and comments made during a recent Westminster Hall debate have called on HM Treasury to increase duty on high-strength, cheap alcohol. Moreover, as indicated in last year’s Budget, and more recently by Nicola Blackwood, Minister for Public Health and Innovation, HM Treasury seems set to introduce a Minimum Excise Tax on cigarettes.