£18bn boost for the NHS

Chancellor Gordon Brown will inject an extra £18billion a year into the NHS in the biggest Budget boost to health spending, reports today claim.

Taxpayers would foot the bill for the huge increase in funding, to be announced in next week's Budget.

Ministers hope the cash will be enough to cut hospital waiting lists, get more doctors and nurses in place and improve hygiene levels by the time of the next election.

Under plans which emerged today and bore all the hallmarks of a Treasury leak, annual growth in health spending would rise from 6.4 per cent to 7 per cent.

Total annual NHS spending would go up from around £55billion today to around £70billion in the likely election year of 2005/6, an increase of £15 billion. A further £3billion would be added to the NHS budget in Scotland, Wales and Northern Ireland, taking the total increase to £18 billion.

The spending plans would put Labour on course to keep and exceed its election promise of bringing British health spending up to the European average by the time of the next election. The Tories will say there is no guarantee that the extra money will bring better patient care - but they are not expected to promise to reverse the spending increase.

To pay for the extra funding, Mr Brown is expected to raise taxes by as much as £5 billion a year, with the brunt of the rise likely to fall on employees' National Insurance contributions.

A rise in the rate of contributions from 10 per cent to 11per cent would raise about £3.3 billion, while lifting the ceiling on the amount of income eligible for contributions from £29,900 to £33,935 would bring in a further £0.9billion. Higher-rate taxpayers would be up to £650 a year worse off.

Reports today suggested that low tax receipts this year could encourage the Chancellor to go for an even bigger tax rise, netting as much as £8billion a year. A rise in stamp duty on more expensive homes could be another option for the Government to raise extra cash.

The present rate of health spending growth is already the fastest spurt in NHS history - and twice the annual 3.1per cent growth rate under 17 years of Tory rule.