Headlines: March 8th, 2000

The Prime Minister’s commitment to increase spending on the health service to the European average should be extended to the remainder of UK public services. This view was presented in a pre budget speech by TUC General Secretary John Monks.Because the UK is a low spender on public services, the adoption of a European benchmark would result in a substantial increase in spending. This would certainly require a rise in spending above the 40% of GDP, which has become the accepted figure for deciding success or failure in managing the public purse. The TUC argues that while voters are unlikely to support increased taxes to fund better public services they are prepared to forego tax cuts to match the best public services in Europe.

The Prime Minister’s announcement on increased health service spending is said to have provoked demands for increased budgets from other ministers. The current discussion on the Comprehensive Spending Review, which is due to be published in July, is likely to keep the idea of European benchmarking of public service spending alive.