Hammond warns NHS boost leaves no money for schools or defence

Chancellor Philip Hammond warned ministers that the NHS £25bn a year rise in NHS spend by 2023 would leave no extra cash for defence and policing, though the Prime Minister is thought to be prepared to go against manifesto pledges and sanction tax rises.

The Chancellor, The Times reported, drew a red line at a Cabinet meeting a day after Theresa May announced an extra boost for the UK health system.

Hammond specifically warned that if the government goes through with the NHS boost it would leave no money for the UK’s military, schools, prisons and police.

One cabinet minister told the newspaper that ministers "could see the implications are going to make life quite difficult".

May had argued in a speech on Monday that the extra funding would come from higher taxes and a “Brexit dividend” from money no longer being paid to the EU after the divorce in 2019.

The funding for the new plans have raised doubts since it is unlikely that there will be a Brexit dividend to support the boost. According to The Guardian, May is prepared to discard the Tories’ tax pledges from 2017’s general election to pay for the new NHS plan.

Planned cuts to corporation tax and a pledge to increase the personal income tax allowance to £12,500 a year by 2020 could both be ditched.