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Friday, 30 November, 2001, 14:33 GMT
'Blind panic' jibe on NHS funding
A patient being rushed through a hospital
The row is growing over health funding
Conservative shadow chancellor Michael Howard claims that the government is in a state of "blind panic" as Downing Street seeks to downplay reports of a rift over National Health Service funding.

Mr Howard, speaking to BBC Radio 4's World at One, said Chancellor Gordon Brown had "boxed" himself and Tony Blair into funding the health service exclusively by taxation.

There is a debate to be had, but to caricature it as the prime minister and chancellor being at a little odd

Prime Minister's spokesman

This "would deny the people of this country the health care they need and deserve", added Mr Howard.

His comments came after Downing Street denied reports of a rift between the prime minister and the chancellor over whether taxes should rise to pay for extra spending on the National Health Service.

Both Tony Blair and Gordon Brown have both said they would prefer the extra cash to come through the tax system, the Prime Minister's official spokesman said.

But the government had not ruled out alternatives, he said, such as a new ring-fenced "NHS tax".

Unhappy with chancellor

The independent report into NHS funding being carried out by Derek Wanless was not yet complete, and the Government would want to study its findings before coming to a final conclusion, said the spokesman.

Mr Brown told the Commons in his pre-Budget report on Tuesday that Mr Wanless's interim report gave firm backing to state funding.

Derek Wanless
Wanless: 'NHS is failing patients'
But Mr Blair is reported to have been unhappy that the chancellor had thrown his weight behind taxation as his preferred option.

Mr Wanless further stirred the issue when he said on Thursday it would be "premature" to suggest he had ruled out any options.

Mr Blair's spokesman said: "There is a debate to be had, but to caricature it as the prime minister and chancellor being at odds, when you look at what the chancellor said on Tuesday and the prime minister on Wednesday, is a little odd."

Some other members of the Government, including former cabinet minister Peter Mandelson and reportedly health secretary Alan Milburn, back the creation of a new tax to pay specifically for the health service.

Opposition attacks

Mr Brown added fuel to the furore when he called in to tabloid newspaper The Sun's offices on Thursday to defend his position - with his key point being that additional funds promised to the NHS would be handed over only if the health service reformed.

In The Sun he warned: "I am going to insist any additional resources must be matched by reforms so that we get the best value for money."

Everyone who cares about the NHS must hope that the Prime Minister wins the argument

Matthew Taylor
Lib Dem Treasury spokesman
Mr Brown said the Government was committed to carrying through Prime Minister Tony Blair's undertaking to match EU spending levels on health by 2005.

Liberal Democrat treasury spokesman Matthew Taylor said: "The health service needs doctors and nurses now. Patients will be the only victims of the Chancellor withholding vital funds from the NHS.

"The prime minister and chancellor clearly disagree about how much money is needed and when it is needed. Everyone who cares about the NHS must hope that the Prime Minister wins the argument."

'Falling behind'

Setting out his findings on Thursday, Mr Wanless said: "The present position is not satisfactory.

"The service is not meeting patients' expectations and we are falling behind other countries.

"But I believe it is right to conduct this review on the basis of the continuation of the present system."

The service is not meeting patients' expectations and we are falling behind other countries

Derek Wanless

In an address to the Association of British Health Care Industries' annual dinner, Mr Howard said: "He (Gordon Brown) fixed the terms of reference for the Wanless Report so that it could only consider a publicly-funded health care model."

The Institute for Fiscal Studies says meeting Mr Blair's target of raising health spending to the European average, would cost another 10bn a year on top of Tuesday's announcements.

The BBC's Andrew Marr
"Your taxes will go up"
Chancellor of the Exchequer Gordon Brown
"I do not rule out tax rises"
Dr Peter Hawker, British Medical Association
"This is a long-term project that is vital to the health of the nation"
The BBC's Justin Webb
compares Germany's health service to the NHS
See also:

29 Nov 01 | UK Politics
Wanless 'open' to private finance
28 Nov 01 | UK Politics
Downing Street fuels tax speculation
27 Nov 01 | Business
Brown pressed to give green Budget
27 Nov 01 | UK
Hauliers welcome tax move
28 Nov 01 | Business
How big could tax rises be?
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