Government’s compensation hike could cost the NHS an extra £6 BILLION by the end of the decade
The bumper pot of cash will go straight onto the UK’s £1.7 trillion debt mountain
JUSTICE Secretary Liz Truss’ disastrous decision to up compo payouts could cost the NHS an extra £6 BILLION by the end of the decade.
The Chancellor revealed today he was setting aside a fortune to cover a potential spike in the size of negligence claims following the ruling by his Cabinet colleague.
He said: “We will protect the NHS from the effects of the changed personal injury rate and have set aside £5.9 billion across the forecast period.”
The bumper pot of cash will go straight onto the UK’s £1.7 trillion debt mountain.
The extra £5.9 billion equates to £22.6 million each and every week for the next five years.
Ms Truss last month revealed payouts for serious personal injuries would have to rise to reflect the big falls in interest rates over the past decade.
The Ministry of Justice insisted she had no choice because of the threat of judicial review by personal injury lawyers. But it sparked uproar from insurers and other firms including theme park operators facing huge potential payouts.
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The Treasury’s independent forecasts yesterday said that as well as the huge bill facing the NHS, motor insurance premiums are likely to rise by an eye-watering 10 per cent.
Robert Chote at the Office for Budget Responsibility said the increase was so significant it was likely to push up the UK’s official inflation rate on its own.
Senior Tories yesterday said the Chancellor’s statement showed the need to urgently review Ms Truss’ decision. One Minister said: “It’s a disastrous decision.
“It would have been far better for (Liz Truss) to have refused to alter the compensation rate and just fought it out in the courts.”
Lib Dem Shadow Health Secretary Norman Lamb said: “This is a car crash budget and having to stump up so much cash like this is the hardest pill to swallow of them all.
“We should be cutting negligence claims and not funnelling more cash into these funds.”