Dorrell wins extra pounds 500m

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The Independent Online
Tory MPs last night wrote off their hopes of a substantial tax give-away Budget after Stephen Dorrell, the Secretary of State for Health, emerged as a winner in the spending battle with the Treasury.

The other winners at the special meeting of the Cabinet were the Home Secretary, Michael Howard, who will get an increase in spending for the police next year and Gillian Shephard, the Secretary of State for Education, whose schools budget will be increased.

The losers will include Sir George Young, whose roads budget is expected to be slashed for the second successive year, Virginia Bottomley, the Secretary of State for National Heritage, who is being told to cut funding for the arts and Peter Lilley, the Secretary of State for Social Security, who was told to provide deeper cuts than he volunteered. Single parents allowance is expected to be frozen. Details will be announced after the Budget on 26 November.

But Tory MPs were writing off their hopes of large-scale tax cuts in the Budget. "The Chancellor will probably raise allowances for the low paid and take 1p off income tax but it is not a winning hand," one former Cabinet minister said.

Another senior right-wing MP said: "I don't expect more than pounds 2 to pounds 3bn in tax cuts. Now we will be saying we have protected public services but the tax burden will have gone up. At the election, I shall be saying, 'Don't blame me'."

The Health Secretary secured an extra pounds 500m for growth on top of pounds 800m for inflation. It came close to the pounds 1.5bn he demanded though the Government was last night facing growing demands for emergency cash to help hospitals avert a crisis this winter.

It could still leave hospitals with the prospect of going into the red or cutting operations, until the money is available next April. Department of Health officials ruled out any interim payment for hospitals before Christmas. In the Commons Mr Dorrell faced a call by Chris Smith, Labour's Shadow Health Secretary, for an emergency package for the hospitals who are going into the red.