Prime Minister Theresa May has signalled a major shift in fiscal policy, abandoning her previous mantra that 'there is no magic money tree' to fund public services. After months of internal debate, she has accepted the case from Health Secretary Jeremy Hunt that the NHS is under such strain that additional taxation is necessary.
Mrs May has refused to specify which taxes might rise, or rule out any particular ones, but has made clear that tax increases are 'on the table'. This marks the end of the Conservative era prioritising deficit reduction above all else.
The prime minister has also resurrected the idea of a 'Brexit dividend' to partly fund the NHS, suggesting that the £9bn annual UK contribution to the EU will be redirected. However, official economic forecasts indicate that leaving the EU will reduce the overall size of the economy, meaning the UK will lose more than it gains fiscally.
Opposition parties have demanded more detail on the tax plans, while Labour itself faces an awkward political position as its own proposed NHS funding during the election campaign was lower than what the government now envisages.
Critics have likened Mrs May's use of the Brexit dividend to the controversial £350m claim made by the Vote Leave campaign during the 2016 referendum, which was widely condemned as misleading.
