Britain needs to find an extra £30 BILLION to fund the NHS and pension benefits from 2020, experts warn
The Office for Budget Responsibility said the Government would have to slash spending or hike up taxes to avoid a huge hole in the public finances after 2020
BRITAIN needs to find an extra £30 BILLION to fund the NHS and spiralling pension benefits in the 2020s, experts have warned.
And the Office for Budget Responsibility said an additional eye-watering £156 billion will have to be found by 2066 as Brits live longer than ever before.
The Treasury’s independent economic forecasters said the Government would have to slash spending or hike up taxes to avoid a huge hole in the public finances after the next Election.
It warned that the country’s debts could triple to an astonishing 234 per cent of GDP without action over the next 50 years.
It blamed the forecast increase in the number of Brits living beyond 65 - placing even more pressure on hospitals.
But it also said technological advances meant the NHS would be treating far more people over the coming years.
Chancellor Philip Hammond yesterday said the stark figures showed the need for “mature” cross-party talks over how Britain expects to fund public services in the future.
He added: “As I made very clear in the Autumn Statement, we are acutely aware that action will be required in order to return the public finances to balance.”
Norman Lamb, the Lib Dem health spokesman, warned that without action “we will see an end to the NHS as we know it”.
RELATED STORIES
In a grim paper, the OBR said: “Rising health care costs could make it harder for the Chancellor to balance the budget in the next Parliament.
“And they will put the public finances on an unsustainable path over the longer term in the absence of further tax increases of cuts in other public spending.”
The OBR – the Treasury’s independent economic forecaster – said health spending alone would likely increase from 6.9 per cent of GDP to 12.6 of economic output in 2066-2067. The cost of state pensions and pension benefits is tipped to rise from 5.8 per cent to 8 per cent.
Some £30 billion-worth of tax hikes or spending cuts are required every decade over the next 50 years to return borrowing back to the levels seen before the 2008 financial crisis, it said.
The OBR blamed the “upward pressure” from ageing and the ‘Triple Lock’ guarantee on the state pension.
In the Autumn Statement last November, the Chancellor vowed to put the public finances back in the black “as early as possible” in the next Parliament.
OBR chairman Robert Chote at the time warned this would prove “quite a challenge”.