27 Mar 2018

Theresa May on NHS and Customs Union

An interesting session from Theresa May at the Liaison Committee this afternoon. Now that’s not a sentence you see very often.

Mrs May said there will be additional spending coming for the NHS and you won’t have to wait until the end of the Spending Review next year to hear about it. Mrs May wasn’t asked about exact numbers (The Sunday Times at the weekend suggested £4B a year extra spending) but it was an indication that government is working on a  spending hike for the NHS.

The plan is to “give the NHS just enough to keep Simon Stevens happy” one former Treasury figure said. Mr Stevens, the NHS chief duly welcomed the Prime Minister’s hint as significant and welcome.

A current Treasury source suggested that officials were still giving serious thought to a 1p hike in National Insurance to pay for the extra spending. Bringing in National Insurance for workers over pensionable age had been roundly rejected, the source said.

Elsewhere in her remarks, Theresa May sounded like she was might be telling us something new on Brexit – another sentence you don’t see very often. In answer to a question about the timescale for re-thinking customs arrangements with the EU, you could be forgiven for thinking that the  PM  was accidentally lifting the lid on some private thinking in Whitehall about how difficult it could be to hit the deadline of end of 2020:

“We are looking at different potential customs arrangements for the future in order to deliver on the commitments that we have made. We are now the point at being able to look in more detail with the European commission at some of those proposals. And I think it is fair to say that, as we get into the detail and as we look at these arrangements, then what becomes clear is that sometimes the timetables that have originally been set are not the timetables that are necessary when you actually start to look at the detail and when you delve into what it really is that you want to be able to achieve.”

No. 10 suggests there’s nothing significant to be read into these remarks. But EU officials have repeatedly rubbished the plausibility of the government’s suggested alternatives to the existing Customs arrangements and i hear that at yesterday’s discussion between the two negotiating teams the EU side felt they heard nothing new.

For its part, the government desperately wants to avoid the backstop that the Irish government made sure was in the Transition Agreement signed off at the European Council last week.

Delaying the departure from the Customs Union would traumatise those  Brexiteers who see trade agreements as one of the great bonuses of Brexit. But could they find this is the price to be paid for securing Brexit and keeping alive the hope of leaving the customs union one day, albeit much further off than they would have wanted?

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