VAT hike will slash £20m from Welsh NHS

By Ann Jones

I am sure that many of you reading this were as angry as me when George Osborne declared that VAT would rise as he laid out his emergency budget before the country back in June.

Via a written question to the Welsh Assembly government, I have since discovered that the Welsh NHS is now set to lose out to the tune of £20.7m next year. The hike will see revenue budgets slashed by £13.2m whilst £7.5m will be siphoned from capital projects. John Appleby, an economist at the King’s Fund has said that:

“[The VAT Rise] will put a huge strain on hospitals and GP clinics as they struggle to buy resources they need to provide proper frontline services.”

Today’s news is a confirmation of his fears.

Vital products and services procured by the NHS are subject to VAT. An article in today’s Western Mail shows us that the cost of a fully equipped ambulance – valued at £225,000 – will rise by over £5,000 whilst a CT body scanner that currently costs £700,000 will come with a £17,500 additional charge.

These ugly realities are revealing themselves after an election where the Tories were desperate to tell us of their new found love for the NHS. Frankly, its about as convincing as Welsh Lib Dem Leader, Kirsty Williams’s, performance at the Welsh Coalition celebration photo shoot back in May.

The hidden costs the public will have to bear as a result of the VAT rise shows just how callous and deceptive this government is. Incredibly, Nick Clegg seems to think he can brush off the affects of this action by simply saying (as he did yesterday) he didn’t come into politics to do this sort of thing. This from a man who spoke into the camera with such apparent passion when the leadership debates covered tax.

It seems that’s all he was doing – speaking to the camera.

Clegg’s answer is almost indifferent on a matter that is hitting the daily budgets of families and pensioners across the UK. Today’s news goes further, uncovering a VAT bombshell that will blow a hole through the finances of our most cherished public service – the NHS. This is a double whammy for those who can afford it least and Cameron knows it.

Whilst discussing VAT on Cameron Direct on 8th May 2009 he said:

“If you look at the effect of sales tax, it’s very regressive, it hits the poorest the hardest. It does, I absolutely promise you…. It goes very very widely and VAT is a more regressive tax than income tax or council tax.”

Cameron’s factual promise is spot on and completely contradicts the pre and post-election rhetoric of ‘We’re all in this together’ and we in Wales intend on exposing this day by day, week by week.

This is not the same as opposing every cut for the sake of it and we should not allow ourselves to be accused of this. I know for certain that many reading the headlines in Wales this morning would have been surprised and angered at the detail of what this regressive tax choice will mean for their NHS.

The emerging realities of a macho budget that bragged to a small elite will continue to unravel. It is our job to make sure that the facts overwhelm the ConDem rhetoric.

Ann Jones is the Welsh Assembly Member for Vale of Clwyd.