The Prime Minister has given the Chancellor carte blanche to rip up her party’s manifesto commitments to cut the rate of corporation tax to 17% and significantly increase the thresholds before the basic and higher rates of tax kick in - if that is what he deems would be the best way of financing her promise to increase NHS spending by 3.4% per anum.
This is not my revelation. It is the FT’s. But I am told, authoritatively, that it is true.
And the bargain between PM and Chancellor is, in an appropriate use of an over-used epithet, extraordinary.
Because cancelling those manifesto pledges would - with a bit of additional funding - pay for the entire health-spending increment.
And although there would have been some grumbling yesterday from the shires had she publicly reneged on the manifesto promises, far better to have done the dirty when announcing a highly popular initiative - viz the “birthday present” for the NHS - than months later when the good news would be ancient history and most folk, and especially media disreputables like me, would only see the pain and perfidy of promise-breaking tax reversals.
This uncoupling of “good” spending and “bad” taxes is one reason why - as I said on News at Ten - the Labour Party and some Tory backbenchers are getting their ducks in a row for a possible snap election in the autumn (there are lots of other Brexity reasons - more on that anon).
Because, of course, such an election would make the last Tory manifesto irrelevant. And the Tories could pay for the NHS’s extra dosh in literally any way they chose, unfettered by historic commitments.
Consider yourself duly warned.