Health spending must rise by £45bn to hit target, think-tank tells Blair

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How an armchair promise by Tony Blair led to some unhealthy tensions in Downing Street

Reaching the real EU average would cost £45bn

Tony Blair will fail to meet his pledge to raise Britain's level of health spending to the European Union average unless the National Health Service receives up to £45bn more a year, a new study suggests.

Gordon Brown will be questioned about the findings of the King's Fund, an independent health policy think-tank, when he meets the Commons Treasury Select Committee tomorrow. In a memorandum requested by the committee and published today in The Independent, the King's Fund says Mr Blair has adopted a narrow measure of the EU's average spending on health – 8 per cent of gross domestic product (GDP). This was the figure in January last year when the Prime Minister first promised to meet the EU average by 2005-06.

The new survey of rising health spending on the Continent shows that the EU average will be much higher – at 10.7 per cent -- by 2005-06. To meet that target, Britain would have to be spending an extra £45bn a year by then, the equivalent of 15p on the basic rate of income tax.

Although the Chancellor has hinted Labour may increase taxes to fund higher NHS spending, only a limited rise is thought to be politically possible.

The King's Fund study found that the Government would have "little difficulty" in meeting its modest definition of the target, which would require a £14.2bn increase in annual health spending by 2005-06. This should have "little implication for taxation policy", says the memo.

Mr Blair said last week: "The EU average ... has been round about 8 per cent for the last decade, and that is the commitment that we are giving ... How on earth does anyone know what it is going to be in 2005? For all I know, they [other EU countries] could be reducing it as a percentage."

He argued that one reason the EU average was rising was the British Government's decision to boost the NHS budget. But the King's Fund study says it would be fairer to exclude Britain when working out the EU average.

Liam Fox, the shadow Home Secretary, accused Mr Blair of being "profoundly dishonest" by defining the EU average as 8 per cent. "It is completely pathetic and shows the level of duplicity Tony Blair employed at the election," he said.